You want to buy a home, but you don’t want to pay 20% more for a brand new home with all the bells and whistles already built in. It just so happens that you’re pretty handy and are willing to trade in some ‘sweat equity’ for a great deal on a house that just needs a little TLC. Buying a place that needs some upgrades is a tried and true formula for getting more house for your money. However, not all “fixers” are the same, and not all of them are going to be right one for you.
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There are houses for sale and in need of repair on every other block. How do you know which one is a potential money maker for you? Most properties that are fixers generally fall into one of these three categories- including the one you want to run far, far away from:

via How to Tell the Fixers-Upper Homes From The Flops | Trulia Tips.