Step One
Decide on the geographic area in which you want a property. Whether you intend to live in a home or not will impact where you'll want to buy. Remember the number one rule in real estate is location, location, location and that your ideal place to live may not be the best place to invest in property.

Step Two
Be prepared for an extensive search.  Many fixer-uppers--particularly those in especially bad shape--don't command much attention, so you may have to hunt around.  Use an agent that specializes in fixer-uppers and keep your eye out for "For Sale" signs in desirable neighborhoods. 

Step Three
Again, keep in mind that "location, location, location" is still the mantra of real estate purchases, whether for a fixer-upper or a single family home. Steer away from properties in areas that are going downhill, because you'll have trouble recouping your investment no matter how beautiful the structure. Find out if the asking price of that fixer-upper is comparable with the prices of other homes on the block. Make sure the fixer-upper is in an area of appreciating house values. That way, your house will be worth even more when your repairs are completed, rather than less because of worsening market conditions in the neighborhood. Have your agent do the homework for you!

Step Four
Start the process.  Your ideal Fixer Expert agent will search the MLS in the areas you are looking for, find the fixers with the most potential and preview them for you before you even see them. You can also search the Internet, look in the paper, on community boards or other public spots for some of the magic words like "fixer-upper," "needs TLC," 'handyman special," or "diamond in the rough."

Step Five
Review local listings of foreclosed properties in your city. When banks or municipalities have had to take ownership of a property, they're generally very motivated to hand it off to a private buyer like you. Work with an agent that has experience with foreclosures.

Step Six
Keep an eye out for properties that need only cosmetic improvements. Houses that could use new paint, carpeting or flooring are the least expensive and offer the fastest potential turnaround. Larger problems such as bad roofs or faulty foundations are often prohibitively expensive and undermine eventual profit, depending on what you got the house for and how much you think you can sell it for.

Step Seven
Watch for vacant homes that have not been kept up by the owner. These forgotten houses can often have the most motivated seller you could hope to find.

Step Eight
If you find an appealing property with seemingly reasonable repair needs, confirm. Have the home professionally inspected. Specify that the final sale is contingent on a satisfactory complete inspection.

Step Nine
Accompany the inspector when he or she goes through the house for a blow-by-blow account. Then review the report in detail to see what's wrong. You may also need to get additional inspections including soil, pest, roof and seismic. Be sure the inspector generates a narrative report rather than a checklist.

Step Ten
Get a formal appraisal ($200 to $400) of the home's value and have your agent work up comparables. If possible, have the appraiser estimate how much the home should sell for after it is restored to good condition.

Step Eleven
Set your target purchase price. Pros suggest bidding at least 20 percent below its potential fixed-up value.

Step Twelve
Get several bids from contractors of how much it will cost to fix what needs to be fixed.  Use a team like the Fixer Experts at Tam Realty that already have relationships with plumbers, tilers, etc. Be sure to check zoning requirements and include permit fees. The house's value should increase at least $2 for every dollar you spend on improvements. Calculate the potential value of the house after renovations and be sure that it isn't higher than comparable houses on the block. Be realistic about repair costs. Do a budget BEFORE you make an offer.

Step Thirteen
Make the final sale contingent on obtaining a satisfactory bid for improvements. That way, if the bids you receive are simply too expensive, you can back out of the deal. Keep in mind that contingencies of any kind could make it hard to negotiate a lower price or even make a deal in a seller's market when competition among buyers can be intense.

Step Fourteen
Pursue a mortgage that includes funds for home renovation, such as the Federal Housing Authority 203(k) program.

Step Fifteen
Let the games begin!  Make whatever repairs and renovations are necessary, be prepared for some twists and turns along the way and then sell the property.

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