In a recent real estate conversation, I was presented with what seemed at first to be a very bold real estate investment strategy.  If you bought high, and now the value of your home is lower, buy another home!

This CERTAINLY doesn't work in all cases, but it is very interesting to think about how it can work well in some situations.  For example, Hunters Ridge....

If you bought a townhouse for $140k a few years ago --- and now realize that it is worth around $70k --- might you improve your situation ($70k underwater) by trying to negotiate a deal to purchase a second townhouse for $60k?  You would then have paid $200k for $140k of property, making each property only $30k underwater.  To the extent that you are looking at your losses over a long term period, you'll be better off trying to recoup a $30k loss on each property instead of trying to recoup a $70k loss on one property.

What do you think?  Smart?  Bold?  Strategic?  Foolish?