Any piece of real estate that an investor would be interested in. An ugly house can have physical damage and in need of major repairs. A house can also be considered an Ugly House due to an "ugly situation" (Divorce/foreclosure/Loss of job).
Ugly houses are typically purchased for 50-60 cents on the dollar.
John's ugly house is going to foreclosure in two months so he sold it to an investor to save some of his equity.
Mike's rental turned into a crack house, and he needs to sell this ugly house as soon as possible.