The majority of fixer-uppers are in complete disrepair, meaning that it will cost you more to “fix it up” than to purchase a home in move-in condition.1) Look in neighborhoods with resale potential.
2) Try to find a home that has been listed for sale for more than 90 days.
3) Always estimate your fix up costs before buying.
4) Avoid homes requiring structural improvements.
5) Avoid major additions, such as adding a family room or bedroom.
The industry standard rule of thumb is to buy a fixer-upper for at least 20 to 30 percent below its “fixed-up” market value. It’s important to avoid both under-improving and over-improving a fixer-upper; in either situation you will not realize a good return on your investment.
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