If you are looking for a fixer upper, you are likely:
1. On a budget.
2. Looking for the deal of the century.
3. A handyman looking to flip for profit.
4. Have been watching HGTV reno reality TV shows.
With so many TV shows depicting the average Joe couples flipping properties after fixing them up, it's hard not to want to jump on the bandwagon.
When buying a fixer upper, there can be a fine line before crossing over into teardown territory. Here are a few tips and items to look out for when you are shopping for a place that needs a facelift vs a demo ball.
HERE ARE THE TYPES OF FIXER UPPERS TO LOOK FOR
THE PROFITABLE FIXER UPPER
Perhaps the kitchen is so outdated that it looks like Florence Henderson should be roasting a pineapple ham in the oven. The carpets are shaggy and an avocado hue which is perfectly paired with the brown and orange floral wallpaper. Looking beyond this, the building is structurally sound, the plumbing is in working order and the electricity has been updated. This is a property that would have good bones and only needs cosmetic upgrades to get the attention of homebuyers. Strongly consider this type of property for a quick and profitable flip. Focus on the kitchen and bathrooms.
SOLID STRUCTURE BUT DISGUSTING (READ: FORECLOSURE)
Periodically, landlords have a very bad set of tenants who absolutely destroy the interior of a property with dirty habits, parties and too many animals. It may be revolting to walk through. You may have to pull your shirt over your nose when you walk through, but keep your eyes open. If you can handle the yuck factor and are able to clean out the garbage, replace the carpets and paint the walls, you may be in for a profitable flip. Do be sure to do due diligence on whether the property had ever been used as a space to grow or manufacture drugs. In this case, proceed with caution.
OLD FASHIONED SPACE WITH LOTS OF MINIATURE ROOMS
Many older properties feature a bevy of tiny rooms to inhabit. While one could dismiss a property with 6 rooms under 150 sqft, but there can be opportunity to be had. Many times, walls can be removed to create a large and open space. If you are looking for a property to remodel by removing walls, you may want to bring your contractor or whomever will be doing the work to verify which walls would be load bearing. Do watch out for old wiring and asbestos in these properties.
If you drive up to a property that is leaning like the tower of Pisa, I would strongly consider you keep driving. Unless you are a developer planning on tearing it down and rebuilding, this is not a property that will be likely to bring you a profit. Problems within in foundation and 'bones' of the house are redflags that should not be ignored. On all properties that you're considering buying for fixing up, a thorough property inspection is paramount. Be sure to assess whether this property is priced beyond just land value.