(MONEY Magazine) – "It's a classic case of buying the worst house on the block and making it the best," says architect William Hefner of the neglected 1926 Hancock Park, Los Angeles bungalow he and his wife, designer Kazuko Hoshino, restored to perfection. After replacing everything in the long-empty 2,000-square-foot house (taking it down to the studs), the couple set about creating an outdoor room at the back of the three-bedroom, two-bath residence. To transform the yard into a private retreat, they jettisoned a dilapidated deck in favor of a simple staircase, a concrete patio and landscaping of bamboo plants and hedges. Their payoff? The place recently sold for $1.3 million--a record for the area, says local real estate agent Leah Brenner.