Seller of old, ugly , or problem properties are not in a position to be very picky about who they sell to. They can't play hardball with the price and term like owners of high-quality, nicer-looking properties. The main reason is that the run down and ugly conditions turn off 95% of all potential buyers. Consequently, lack of buyer competition will greatly limit the owner's ability to sell.

What this means is you can almost always buy these properties for much less cash up front (lower down payments). Also , it's likely the seller will be forced to accept much weaker terms. Lower equity payments and carry back notes are very common. Some of these deals cab be 100% owner financing. Ugly, fixer-upper properties are generally older  properties. Many of hem no longer have conventional mortgage (i.e., bank loans or savings and loan mortgage) to pay off. When they do, they are most likely low-balance loans with lower interest rates and nearly always assumable to new buyer. For beginning investors especially, the owner financing is the kind you want. Owners are almost always more flexible than banks.

Property purchases where the owners will carry back low-interest financing are the kind of transactions that allow you to buy with minimum cash down payments and yet still be able to generate cash flow. Bank financing with higher interest rates and variable rate mortgage is not what you want. Bank financing will seldom be much of a problem when you buy older, rundown type properties. The reason is that any original bank loan having long since been paid off -m and most banks won't write new loans on older properties today.