I have painted a few houses over summer breaks and this is what I was told to do by the boss. Get a kit to test for lead based paint. If it comes back reading lead stop. If not Start by using a scraper with a good sharp blade to knock the bubbles and paint lifts off. If that has taken the paint down to the wood, feather the paint edges with sandpaper and prime the bare spots. Some people like to clean the paint first (removes paint and grime), some like to clean after sanding. Don't power-wash. A power-washer can do more damage then help. Caulk the seams and putty the holes and use either a brush or exterior paint sprayer (rent a professional one) to lay down a nice even layer of paint. Mask if you want or use a piece of cardboard to prevent over-spray. Most of the time the finish turned out fine and still looks good today.
Here is a more in-depth article:
The $500 Makeover | How to Paint Your House's Exterior | This Old House