We have taken the strategy of starting to look for replacement Properties as soon as we decide to sell the relinquished property and we have never gotten burned badly.

I would not do this because I think a lot of tenants would either try to fix it themselves or wait until the problem is really bad to notify you.

Narrow your choices that way.  

I have heard good and bad from some friends in that area that a lot of houses are on the market up there.

We have been reading consistent posts for four years now regarding "it's a bad time to start", "the recession is near", "I can't find good deals", "the market stinks", and similar posts. 

This could be due to a bad internet connection.

Passed on making an offer because the inside of the house was SO BAD it even scared the agent away.

Other than that, their interest rates are competitive and points aren't too bad and no other hidden/junk fees.For my next rehab I'm going to use Iron Bridge Lending based out of Portland, OR.

You don't want to strain any relationships with the seller or else you could develop a bad reputation. 

So, they could potentially end up with already bad credit, worse credit after a short sale, and a possible creditor waiting to strike.