Would you say a person is dumb for buying a house for $10 thousand dollars?

Yes there probably was something wrong with the house but it may also be true that the person that bought the house has the money to fix it up and then re-sell the house at a much higher price. This way he or she not only gets his or her money for the fix ups but also gets his or her money back from the original sale. In Real Estate this is called flipping a house. Buy cheap, fix it up, sell at a much higher price.