The property is in pretty bad shape, broken windows, doors, stolen AC, copper pipes etc.

For example you can not finance properties with health and safety issues for example no heat source, no flooring, broken windows, no stair railing, no smoke or CO2 detectors, pool with green water or empty, bars on windows that do not have safety latches and other things.Q.

A property that has wood siding in the north and a roof with 2 years left will have significantly different returns than a sided and re-roofed house with new windows.

(Oh - don't forget a photo!

A home he bought @ the tax auction (4 years ago) sits empty & in bad shape, yet he took an investor (that we financed) to court for non painted window frames installed recently in 25deg weather.

How do I know that the windows will close and open, how do I know that doors will not be stuck, how do I know that sheet rock won't sag, or that an electrical outlet will go pooof?

Lots of broken windows and soiled floors, and likely structural/foundation issues as it was built in the 1920's.

They are both great at learning the fundamentals.Oh - and don't forget to set up your Keyword Alerts!

They are both great at learning the fundamentals.You may also enjoy this post, about multifamily properties: How to Buy a Small MultiFamily Property: A Step by Step Case StudyOh - and don't forget to set up your Keyword Alerts!

A lot of banks won't finance a fixer upper, so keeping that in mind you may need to use a HML, private lender, somebody from an REIA meeting, or another loan method I'm forgetting to mention, depending on quality of the property.