I work with some investors in Brockton who are making out great with short sales/foreclosure purchases. They buy well below market value, and rent for a good profit. There is such a market for rental properties now with what the market has done. I don't know too much about Lynn, but it looks like you are in the same price range as my clients, and they are doing very well at those prices.
Assessments in Lynn are based upon January 2007 values. Obviously there's no relationship between the assessed value and the real market value. Don't even consider that in the quotient.
Short sales can take two to four months (some even longer) to get a response to your offer, and you may find it countered by the lender at a price even higher than the listing price when you do hear from them.
The listing price is simply a point at which their listing agent believed they may get an offer from a preapproved buyer. It does not obligate anyone to anything. I truly believe the best values out there ARE short sales, but you have to be willing to take the risks that result in the savings. Try to make sure your offer contract is structured to not lock you in to the process if the wait becomes too uncomfortable for you or if you find another property in the mean time that interests you more.
A good buyers' agent will be able to provide you with sold comparatives to justify the price you are paying as well as considering the under agreement properties in MLS and the actives. They should be able to put together a coherent analysis using those three tables of information to justify your offer amount. The rental market is not as good as it was three years ago, but then there are also a lot of rental units off the market because of foreclosures to make it more competitive.
Lynn, as a market worthy of investment, is a great opportunity. We are only 7 miles from downtown Boston, surrounded by some of the wealthiest communities in New England. Our prices are traditionally among the lowest in the state, but the potential upside is always lurking around the corner depending upon gas prices, public transportation improvements, etc. And our public high schools have again been written up in US News and World Report as among the best in the country.
Not bad for a city with a decades old bad reputation among the outsiders!
I missed the last part of your question. Apologize.
A short sale can be a lengthy process but worth it in the end. The banks really take their time. If there are other properties you are considering you may want to weigh the wait time as a value.$$$ In other words. If you see another property that is not a short sale and can purchase it and have it rented within 30 days of your purchase than that property might actually be worth more.
We find that rentals don't move as quickly in the winter as they do in the spring. They move, just not as many renters apply and they aren't in a big hurry like in the spring. So if your closing date puts you in the middle of winter you may not get the rental fees you are looking for as quickly. If the short sale is expected to drag out til March and you can have the property ready to rent in a month or two you could have more applicants to choose from.
The down side to short sales is you can miss other properties for sale while waiting for the lender to decide. Thats just the game of real estate. And thats why I tell our clients to give a $$$ Value to the wait/closing time.
Hogan Real Estate, Inc.
Everyone needs a place to live and that includes people who have been foreclosed on. If your homework is complete as my fellow associate Michael Giles said and the purchase does not put a strain on your financial position right now then I say go for it.
Only you know if you are ok with the location and specifics of the property. So look closely, decide consciously and remember its your money and you decide who you want to give it to.
Hogan Real Estate, Inc.
Use this link to get a full analysis on a multi-family investment. http://michaelagiles.yourkwagent.com/atj/user/AdditionalGetA It is a great time to invest as long as you do your homework and understand the rental market in the area that you are looking.
Don't get wrapped up in the assessed value, It really doesn't mean much. Feel free to contact me with any other questions, I am familiar with the Lynn market.