Talking to people who have had experience with buying fixer upper homes, you'll find that there's a wide variety of experiences from buying total financial nightmares to unearthing diamonds in the rough. If you are able to find the right property in the right location and are able to understand how much money you'll need to pour into improving and repairing the house, this could be a very profitable venture, an opportunity to buy low and sell high.

The obvious benefit of fixer uppers is the price. Undervalued properties can catch you a good price when you resell it, provided you keep a few things in mind. Some houses that need "a little fixing" are best left alone because there are some house repair issues that become a veritable black hole where your money goes and never comes back. Unless you have a particular reason for buying a fixer upper even though you can't profit from it, it's best to know when to stay away.

Here are a few tips to start you off:

1. Location, location, location - One of the fundamental principles of finding good real estate (whether it's a fixer upper or not) is finding one in a good location. Let's say that your target market to buy a property is in Vista. When looking around for Vista homes for sale, it's best if you can find a house in a good neighborhood, preferrably not surrounded by myriads of fixer uppers. Fixing up a fixer upper in a downhill neighborhood is not such a good idea. it's best to get Vista real estate that is auspiciously located.

2. Get a house with good layout - Picture the house bare of any furniture and decor and look at the basic floor plan. A poorly laid out house will be a problem no matter how much money you put into remodelling and repairing it. It's best to look for a house with a good enough basic layout and, if possible, one that will let you experiment with adding more rooms or features. For example, an oversized room can be divided to include a walk-in closet or another bedroom. Both will significantly raise the appeal of the home to future buyers and boost its value a lot. Putting in walls will probably gain you more money than you will put into the improvement.

3. List down things that need to be fixed - When you have the house inspected, you'll get a better idea of what needs to be fixed. However, walking through the house and being attentive with what the house needs will help you determine how much you'll offer for the house. You have to expect that fixer uppers will be a project, and sometimes it would take time to complete. Maybe you'll have to rent while the kitchen or the bedrooms are being remodelled. It's important that the home inspection comes back with good reports on the foundation, the roof, and other important (and expensive) parts of the house. If you encounter serious issues, it may cost you more to address them than what you'll make if you sell the house someday.

Unless it's going to be your dream project home, buying a fixer upper that's going to need a lot of money for the important stuff like the foundation is generally not a profitable idea.