Advantages of buying the cheapest house on the best block

It's an affordable way to gain access to an expensive neighborhood. The best locations are usually the most unaffordable. Buying the cheapest house allows you to join the club.

You're almost guaranteed a property value boost. Your house will be worth a lot more once the expensive houses on your block get sold. Obviously, owners of the most expensive houses don't get to enjoy this perk.' You'll get more interested buyers. As I mentioned earlier, most buyers stick to purchasing houses priced in the middle range — not the most expensive, and not the least expensive. So even if you do the minimum amount of renovations, you'll still hit the market at higher price and get a lot of interested buyers.

You could buy it at an even cheaper price. Not all buyers have the confidence to undertake a major renovation project, so you'll have fewer buyers to bid against when it comes time to strike a deal. That said, you might be able to negotiate the "already-cheap" price down to an even lower number.

Getting started

Take your time. For 99% of the population, buying a house will be the most expensive purchase they'll ever make in their lives. Don't rush. Create a spreadsheet. Calculate the numbers. Do the research.

Find a local agent who has a strong track record in the area. A local agent with years of experience can provide you with the best advice and a better understanding of how values have changed over the years. They can also spot a good deal when it pops up.

Compare recent sales. Ask your agent to provide you with comparables (or "comps," as they call it in real estate). That data will be much more accurate compared to what you get from sites like Zillow and Trulia. Those are also great, but they can be misleading since the data is based on an algorithm system.

Research repair estimates. Talk to at least two contractors to estimate the costs of vital reparations. Houses in need of major work are often sold "as-is" — meaning the seller won't make any repairs or offer any credits for potential defects. Never spend more than you can afford on renovations, and try to keep in tune with market trends in terms of popular fixtures and fittings.

Josh Altman, real estate powerhouse of the Altman Brothers, is a top-producing agent in Beverly Hills and is continually ranked as a top 25 realtor in the country by numerous media outlets including the Wall Street Journal for having sales over a billion dollars locally, nationally and internationally. He is also the author of "The Altman Close: Million-Dollar Negotiating Tactics from America's Top-Selling Real Estate Agent."