“How do I find a good fixer upper house for sale?” This is a common question we hear among aspiring real estate investors, especially fix-and-flip investors. That’s because this type of property represents a great opportunity for making money in real estate. Fixer uppers – houses that are in poor condition and in need of repair – are typically offered at a lower purchase price, and thus, can provide a significant earning potential for real estate investors once they are fixed up and sold (or rented out). Many of the fixer uppers for sale in today’s housing market are properties under foreclosure, i.e. properties that have been repossessed by lenders, usually due to non-payment of mortgages or taxes.
If you are new to the world of real estate investing and wondering how to find a fixer upper, this guide is for you. Below, we show you 7 different ways you can go about searching for and finding fixer upper houses for sale easily.
How to Find a Fixer Upper House for Sale: 7 Ways
Drive for Dollars
The first way on our list of how to find a fixer upper house for sale is to ‘drive for dollars’. Hop in your car, drive through your target neighborhood, and look for properties that appear to be distressed or abandoned. These properties typically stand out from the rest of the homes in the neighborhood. You’ll want to keep an eye out for the following telltale signs: neglected lawn care, broken or boarded up windows, faded or peeling paint, deferred maintenance, uncollected newspapers at the front porch, etc. When you find a property that’s showing any or all of these signs, make sure to write down the address so you can find out who owns the house later.
Related: What to Look for When Driving for Dollars: 19 Things
Search the MLS
Another way to find fixer uppers for sale is via the Multiple Listing Service, or MLS. The MLS is the official database for all the property listings in the US housing market. A real estate license is required to gain access to it, but you can still work with a real estate agent or broker if you don’t have one. To find fixer uppers for sale on the MLS, look for property listings that are labeled as ‘Short Sale’ or ‘Real Estate Owned (REO)’; these usually point to distressed properties for sale. Additionally, look for properties that have been on the market for more than 90 days. Homeowners who have listed their properties on the MLS for more than 90 days are not only likely to be motivated to sell, but may be holding onto a fixer upper that no one else is willing to take on. Just be sure to conduct an inspection on such homes to understand what other buyers were avoiding (if that is the case).
Look for Auctions
Real estate auctions are another good way to find fixer upper houses for sale. Auctions can provide plenty of opportunities for a discount purchase as you’ll be able to find all kinds of foreclosed properties, at all stages of the foreclosure process. But, you’ll want to watch out for potential bidding wars. Check your local newspaper or go to the county courthouse to find out about upcoming auctions in your area. You can then attend a few and bid on whichever investment properties you like. You can also consider using online auction websites to search for specific types of investment properties for sale in your target location. You can then place your bid on these properties through the site. A good example of a real estate auction website is Auction.com.
Related: How Do Online Real Estate Auctions Work?
Use Real Estate Investor Websites
Just as you can with a traditional investment property search, you can also find fixer upper houses for sale on real estate investor websites. One example is Mashvisor.com, more specifically the Mashvisor Property Marketplace. This online tool provides a vast supply of off market property listings in the US real estate market. These include foreclosures, short sales, bank owned homes, and auction properties. And you can set a filter to specifically show you investment properties for sale that need repairs to ensure you only spend time looking at and analyzing fixer uppers.
Alternatively, if you sign up for an Expert Plan with Mashvisor, you can set the ‘foreclosure’ filter on our search app to search exclusively for foreclosures for sale on the platform. You can also use other filters (such as budget, cash on cash return, cap rate, number of beds and baths, and more) to narrow down your search to match your criteria.
What makes Mashvisor different from other real estate websites is that it allows you to analyze the investment potential of the properties you find on the site (or even off market properties!). For instance, say you find a fixer upper investment property that you plan on fixing up and renting out; thanks to Mashvisor’s Investment Property Calculator, you can actually evaluate the property’s profitability based on metrics such as cash flow, cash on cash return, and cap rate. The analysis will also allow you to take into consideration the cost of renovation and how it will affect your return on investment (ROI). Try it out for yourself now.
Related: What Is Mashvisor? What Can It Do for Real Estate Investors?
Use Bank and Lender Websites
Real estate investor websites aren’t the only place where you can find fixer upper houses for sale. You can also find them on bank and lender websites. Most banks and lenders post listings of all the foreclosed properties they currently possess on a dedicated section of their website, usually under ‘REO’ or ‘Bank-Owned Homes’. It’s worth mentioning that financial institutions aren’t really fond of keeping properties in their possession, but would rather unload them to real estate investors when they have the opportunity. Perusing bank-owned property listings can, therefore, be a good option if you are looking to buy at a fixer upper at a good discount.
Check Tax Records
Next on our list of how to find a fixer upper house for sale is to sift through tax records to find properties with delinquent taxes. Delinquent taxes suggest that the property owners are in financial trouble. It also means they have likely delayed maintenance and now have a fixer upper on their hands. Finding properties with delinquent taxes is quite easy. You can get a list of all the tax-delinquent properties in your area at your local tax assessor’s office, or using their website.
Hire a Real Estate Agent
If you are serious about finding good real estate deals for your fix-and-flip or fix-and-rent real estate investment strategy, you can always hire a real estate agent with house flipping experience. An experienced agent will know exactly where to look for fixer uppers and will try to find you the best deals out there. They have an extensive network of real estate professionals including lenders, loan servicers, and wholesalers, who can refer them to many distressed real estate properties that you can’t find anywhere else on the market. And, as we mentioned before, they have direct access to the MLS and other resources that aren’t accessible to the general public. They can, therefore, use their skills and expertise to assist you in your search for fixer upper investment properties and even help you acquire them at the best price possible.
There you have it, seven ways to find fixer upper properties for sale. Some of you are now probably wondering: “But, what is THE best way to find a fixer upper”? We tell you this: There is no one single way that works for every real estate investor. There are many different strategies out there and you should look anywhere you can. We suggest that you try combining several strategies rather than sticking to only one. This will put you in a better position to find a fixer upper that suits your goals.
What’s Next? Once you’ve found a fixer upper, you will need to find out how much work is needed to fix the property, and how much it is going to cost. Then, you will need to calculate the property’s after repair value (ARV) to determine if it will be a profitable investment.