- Step 1: Look for buzzwords When searching the newspaper or a multiple listing service for a property, look for buzzwords like 'handyman special,' 'as is,' 'fixer-upper,' or 'diamond in the rough.'
- Step 2: Consider location Look for houses in up-and-coming neighborhoods with low crime rates.
- TIP: Avoid upper-class areas, where flipping is more difficult.
- Step 3: Walk neighborhoods Walk target neighborhoods looking for homes that appear vacant and in great disrepair. Look for poor or nonexistent landscaping, broken fences, peeling paint, old fixtures, outdated appliances—even an ugly front door.
- TIP: You want a place with cosmetic problems, not structural, plumbing, or electrical issues.
- Step 4: Dig deep Look for hidden gems in the home, like beautiful hardwood floors under musty old carpeting; a gorgeous stone exterior buried under decades of grime and soot.
- TIP: Look for owners who are motivated—or desperate enough—to sell for less than market value.
- Step 5: Check for time bombs Have the house inspected for hidden time bombs like termites, underground oil tank leaks, mold or asbestos, and other large-ticket problems like heating, cooling, or infrastructure defects. If everything checks out, it might be time to consider buying—and then the real work will begin.
- FACT: Adding basic landscaping to a home can increase your returns by 100% to 150%!
You Will Need
- Real estate listings
- A keen eye
- A home inspector