Something that often scares newcomers to real estate investing is how to tell when a property needs too much fixing up to make it a good investment. If the property is in really bad shape, the owner may be motivated to sell way below the market value of a similar property that is in good condition. If you are dealing with an extremely low sale price because the property needs repairs, you have more borrowing power for your repair and rehab loan.
However you must know the difference between cosmetic distress and serious problems. Here are few things to watch for: