How to Find a Fixer Upper Home

Real estate investors are constantly on the lookout for fixer upper homes that are cheap yet still in a reasonably good condition. All that a decent fixer upper will require is a small investment to make the space livable and desirable to a prospective buyer or renter. If you are interested in finding fixer uppers in your area, there are a few places where you should start your search.

Difficulty: Moderately Easy

Instructions

1. Bid on properties that are up for foreclosure. Call your town administration office to get a full listing of the latest foreclosure properties in your area. Check the "legal notices" section of your local paper to see a listing of properties that are being foreclosed on. Be sure to take note of the date and time of the auction.

2. Purchase HUD (Housing and Urban Development) homes, which are frequently fixer upper properties. Search the listings at HUD.gov and then contact your realtor in order to place a bid. You will need to be pre-approved for a loan or have cash to purchase the house if you win the bid.

3. View home listings on Realtor.com. This is a comprehensive data base of homes for sale in your area. It is a database of MLS (Multiple Listing Service) properties from across the country. Search within a city or state and include your desired price range. When browsing your results, look for key terms and phrases including "has potential," "fixer-upper," and "an investor's dream."

4. Hire a real estate agent that specializes in finding and selling fixer uppers. There are some agents who exclusively work with real estate investors to find and match them with ideal fixer uppers. An experienced agent will be familiar with the area that she serves and can best advise you on whether a property is worth the investment.

Tips & Warnings

• Have a full home inspection done before you sign on the dotted line. Sometimes your initial estimates for fixing up the home might not be comprehensive. Use an inspector to identify hidden issues with the fixer-upper property that could be very expensive.
• Don't accept the asking price on the property on the first round---bid under the asking. The seller could either accept your bid or place a higher counter offer.
• In order to win a bidding war with someone over property that you have in your sights, you might have to compromise on your demands. For instance, don't add a contingency that you will only buy the property once you close on another investment first.

References

• Homes.com ; Investment Properties: Foreclosures and Fixer-Uppers
• HGTV; Bidding War Basics For Buyers; Viviane Kertesz
• Real Estate ABC; The Multiple Listing Service

Resources

• Realtor.com; Can you make a killing buying fixer-uppers?; Marcie Geffner
• Recommended Reading for Prospective Real Estate Investors

[suziecat7]

on 11/22/2009 Great and informative article - thanks.