Tackling Foreclosures

"Flip Men's" Mike Baird and Doug Clark flip houses they purchase at auction.
3:00 | 11/29/11

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Transcript for Tackling Foreclosures
And to the economy new housing market numbers are out today and they are not encouraging. Home prices last quarter fell three point 9% year over year according to one national index. And after months of improvement the number of -- closures has begun to creep up again. The -- for the foreclosure -- boys were about to meet that bad news. Could be good news. Here's ABC's Ryan Owens with tonight's royalty check. -- -- Mike Baird and Doug Clark our business partners among the resourceful few who've actually figured out. How to make money in this topsy turvy housing market never again thousands. Shopping cart just -- and driveway and they do in life split -- foreclosed whole -- That's over here in this area at 56 grand on this is that going to be cheap enough they've sold a thousand and tell me there's a lot of homes to choose from. A lot of properties in the well. And you have a favorite -- shot. It's the same story for much of the country. Last month one out of every 563. Housing units nationwide. Went into foreclosure -- Nevada has the highest rate one in a 180. California is next with one in 243. In Utah all where -- -- Dunbar it's one out of more than 500. Their business which they operate together out of Salt Lake City is not for the faint of heart. They buy these foreclosures at auction which means they have to put down their money is -- -- jump -- -- really we were -- or they amber stepped inside. So what they discover once they do can be disturbing that right there that -- And disgusting that's not catch it I can't that -- Whose -- and this is off the charts with a perfect recipe for reality TV. Here. What does it say about the housing market right now in the United States that there are so many foreclosures. You can -- a reality show out. It's a huge problem I mean that we're trying to show when it really is the names and faces the stories the places because we see it must. I'm Mike here. -- Clark air show debuted this season on spike TVI cables Arnold as -- dumb macho men. I think you see a much more real wrong. Feel our business and how intense this dog and I are head to head every day simply because. It's a lot of money. It's true Mike and Doug don't have to manufacture much drama. Take this home they bought and a nice Salt Lake -- They -- -- 190000. Expected to put about 35000. Back into it. And sell it for 240. A quick profit of at least fifteen bells and that was the plan. Until we walked down into the basement. He can already smell this a long time before you get down here. Yet if it hits you like right about here wrong. There is mold all over the walls and something even worse you know growing out of -- damp carpet. Whoa whoa -- what is this but just -- It's -- -- for real this looks like from an easier I don't either bodies -- actually mushrooms that are starting to grow out there. -- harvests this is bad news is that as -- as -- -- as far as more than obviously all. The next day Mike and Doug were back in the basement with the Hazmat suits and ripping up the carpet and tearing down the walls. All of this work and they still will not make a profit on a house that looked -- so promising from the outside. The biggest risk for us as we don't know -- That is risk homes like this one they nicknamed the dungeon house because of this -- -- -- back. They quickly demolished. OK guys I look around here and I see -- don't what do you say well. They bought it for just 51 bells and they will put a mere 7000. And over the next week or so and put on the market for nine. A quick profit of more than thirty grand. So is this the most expensive -- because -- ever bought. By far yet how much does this one go for just over one point six million and you hoped to sell it for. Two and a half to half -- He has six bedroom suites ten bathrooms a pool and in ground trampoline out back a racket in basketball court inside. Mike and Doug had 25 minutes to decide if they wanted to -- Compare this else too the moldy basement -- sort of a number of other houses we've seen. Which one gives you the biggest nightmares is -- this one just because there's so much money tied up and I absolutely without question absolutely we know we can fix -- we can -- more we can fix a lot of things. But a house like this in this market news is maximum risk -- As we said not for the faint of heart. But if you start small and simple these -- say there's no reason you can't turn this tough housing market into real cash. After all. They've turned it into reality TV they come with the -- -- no guarantee I'm -- Owens for Nightline in Salt Lake City.

This transcript has been automatically generated and may not be 100% accurate.

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