Hanging out in Mike Clancy's diner, the Bowery Boys are engaged in their usual loafing sessions; Sach works on a puzzle book; Duke chows down on Clancy's Irish-stew special, and Myron, Chuck and Blinky are looking at the pictures in the eatery's library of comic books. Two diners, real-estate agent Harry Shelby and his assistant, Dolly Owens, hear that Mike has been ordered by his doctor to take a long rest in the country. They sell him "Cedar Crest," -a paradise in the mountains---which actually had been a robber's hideout. Mike and the Bowery Boys move to the place and find a dilapidated farmhouse. While doing repairs, they find a secret compartment containing new banknotes. Thinking they have found a recluse's treasure, they pay off the mortgage on Cedar Crest. This draws the attention of three hoodlums, Snap, Ziggie and Ernie, who order Shelby to buy back the place. Sach, Duke and Mike refuse the offer, even when told the place is haunted. Meanwhile Dolly has vamped Sach into revealing how they got the money to pay off the mortgage, and she and Shelby devise a plan of their own of obtaining the house with many greenbacks in deposit. A few nights later, the six residents find themselves harassed by a pair of phantom-like goons, and attacked by three loot-hungry gangsters.