I hear people BMWing all the time about REOs and other MLS properties having too much competition, with the prices going too high. Well, here's what one investor in my area is doing - and these are not even REOs or your typical "motivated" sellers, or "distressed" properties. But they are right there on the MLS - out in plain view. Basically, he's buying brick houses that are solid and in good condition - but ugly. These are mostly houses that were built in the 60s and 70s that have never been updated. He's getting these at a small discount, then taking out all of the old stained-wood doors and trim, the paneling, the old ugly cabinet, and the baths. And then updating everything to look modern. After the update, these are selling for prices that are very near those of new houses. I've never really talked with him about it, but I've studied his "before" and "afters" on the MLS, and it's easy to see what he's doing (another advatage of being a Realtor).