People love the idea of fixer uppers and flip houses, but in real life they aren't always as glamorous as they look on HGTV. Before you set out to find a run-down house to transform into your dream house, make sure you know how to find a diamond in the rough that won't turn into a money pit. You should also know how to do the math to make sure the home is worth your investment. See the short list of things you should know before purchasing a fixer upper and listen to the show for extra details and advice from Dave and Robert. You'll also hear from James about options for financing a fixer upper.

Find the worst house on the best block. Aim to spend 20-25% less than what a property in good shape would cost in that area.
Find a fixer upper that only needs cosmetic fixes. Avoid homes that have structural, plumbing or major mechanical problems.
Look for a home with strong structural elements, a floor plan that works, a home with no infestations (pests, mold, etc.) and a home that has been recently occupied.
Have a contractor check out the property before you make an offer on it. They'll help you get an idea of how much your renovation budget will need to be.
Do the math to figure out if it's a sound investment and stick to your budget once you start the renovation!
Have a strong team that you trust around you every step of the way.

LISTEN TO MORE EPISODES OF THE REAL ESTATE REPORT