When people buy a home, they focus on where they will live their lives, building family, memories, and stability. That makes perfect sense. By using the right strategy, you can keep that vision and still unlock what may be the best investment of your life.

When I bought my house in Los Angeles (a $4.65 million purchase), I, too, was focused on buying my dream home. But the day I signed the papers, I made one million dollars. Here’s how I did it, and how you can apply the same principles when you buy your home.

Buying Below Market Value – Even in a Hot Market

Myth: To make a huge profit in real estate, you have to find a “steal” or an off-market, secret insider deal. It’s simply NOT true. My home, located in a very desirable location, was on the market for months in a hot market. Every viable buyer, agent, and investor in town had already seen it…and passed on it.

At that time, in a hot market, even mediocre properties were attracting multiple offers. And yet, I bought my house more than 20 percent below market. It’s much easier to do this today!

If you know where and how to look, you can find huge opportunities hiding in plain sight. The opportunities are hidden behind what I call “brain damage.”

Make “Brain Damage” Work for You

Brain damage includes: highly visible flaws, weird quirks, seemingly unsolvable problems, and outright defects that scare most buyers away. Some are superficial, like poor design choices or cheap finishes. Others are more serious, like a non-functioning HVAC system or brand-new piping and hot water system that serves up only cold water to 80% of the house. These all existed in the house that I bought.

For most buyers, these issues are deal breakers. But savvy investors actually look for Brain Damage – the serious, obvious flaws that scare buyers and force sellers in any market to take a steep discount.

My house had major brain damage—here are just a few of the lowlights:

• Mechanical Systems That Didn’t Work. Brand new HVAC units that wouldn’t turn on. The pool equipment had no way to turn it on or test it. New piping and two large-capacity Instant hot water systems that delivered only cold water to most of the house.
• Many, Many, Thoughtless Design Choices. Over a hundred harsh overhead lights with no dimmers. Cheap bathroom fixtures, zero marble or granite in a “luxury” house, a massive primary closet finished with plywood that made Ikea look like luxury. And, more—all in a nearly $5M house. This simply is not acceptable to buyers in this price range.

None of these problems made the house unlivable, but together they made it unattractive enough to sit on the market, while other homes sold in days with multiple offers.

However, despite innumerable flaws, this house had undeniable strengths.

The views alone are world-class—what I’d rank as a 95 out of 100. At nearly 5,000 square feet, all on one level, it offered ample living space. The infinity pool looked like it was carved into the horizon. The location was excellent: central to bustling Los Angeles (minutes from West Hollywood, Beverly Hills, and Studio City), yet it feels like a quiet countryside escape. Despite sweeping views, I have no visible neighbor to one side of the property.

For those few who can see past the myriad of defects, you can see massive, enduring value.

It’s All About the Math

At the time, a well-built and designed home in this location with similar views was selling for well over $1,200 per square foot. The house, with zero defects, was worth $6M all day long.

This house, with all its defects, sat on the market at $4.75 million. I bought it at $4.65 million.

My team estimated repairs/fixes at $200,000 or less. My all-in cost for this house in excellent condition was $4.85 million ($4.65M purchase + $200,000 for repairs). The $4.85 million total bought me $6M worth of house!

Related: Why Real Estate Should Be Part of Your Wealth-Building Strategy

And, in the end, I spent less than the $200,000 estimate. A missing computer chip restored the HVAC system. The plumbing issue was vexing, but a great plumber (the 4th one) finally solved my mystery hot water issue for a fraction of the other quotes. Adding WiFi-enabled dimmers to all the lights transformed the atmosphere. I found two potential fixes for my primary closet – a super high-end closet company quote of $60,000 or simply fill it with clothes and the problem disappears. I chose the latter!

The Importance of Due Diligence

None of this happened by luck. The key to avoiding a money pit is thorough due diligence. I hired the toughest home inspector I could find, paying him more than his asking price just to ensure he’d squeeze me into his schedule. I brought in contractors, engineers, and even a geologist to confirm the infinity pool was properly set into the hillside. I’m not an expert at any of this. But I hired experts.

Their verdict? Everything was fixable for $150,000, which I rounded up to $200,000 for safety. And that information gave me the confidence to move forward.

This is where most buyers falter—they either don’t dig deep enough, or they let cosmetic flaws overshadow intrinsic value. My process was simple: identify every defect, separate the permanent from the fixable, and price out the solutions. Once I knew the fixes would cost far less than the equity upside, the deal went from Brain Damage to No-brainer!

Living With Imperfection

Another lesson I learned: you don’t need to fix everything at once. In fact, sometimes the smartest move is to live with the flaws for a while.

I thought the primary closet would be my first renovation project. But once I moved in and filled it with clothes, the problem disappeared from daily life. I was prepared to spend $60,000 on a California Closet system; today, that project has been pushed to the bottom of the list.

The same goes for the kitchen. The cabinetry was cheap, but the appliances were top-of-the-line. Two years later, I still haven’t ripped it out. What seemed urgent at first turned out to be tolerable—and that has saved me significant money.

How This Applies to Any Buyer

Now, you may be thinking: “That’s great for a $5 million property in Los Angeles, but what about me?” The principles scale down.

Imagine a $465,000 home that could be worth $600,000 if the right fixes are made. With 10 percent down and closing costs, you might get in for $50,000. Add $30,000 in strategic improvements ($465K + 30K = $495K home cost), and now the house is worth $600,000. You’ve created $100,000 in equity. That’s more than a 100 percent return on your cash investment—while living in a better home.

Look for Brain Damage and buy well below market value to create instant wealth.

The Team That Makes It Possible

Here’s who you need on your side:

• A Great Realtor. Not just any agent, but someone who knows the neighborhood intimately and has worked with developers. Their market knowledge is priceless.
• A Tough Inspector. You don’t want someone who glosses over problems. Pay extra for an inspector who will dig deep.
• Trusted Contractors. Bring in specialists—HVAC, pool, plumbing—so you know exactly what you’re facing.
• A Solid Lender. When it’s your primary residence, you can get much more favorable loans –better rates and less money down. Having a solid lender on your side is key.

This team doesn’t just find problems—they help you evaluate which problems matter and how much they will cost to fix.

The Big Picture

When I signed the closing documents, I knew I wasn’t just buying a house. I was securing a $1 million head start on my investment. The view, the location, and the structure all had lasting value. The “brain damage” was simply noise that scared away other buyers, making this possible.

Real estate rewards those who can look past imperfections, run the numbers, surround themselves with great professionals, and trust the process. Whether you’re buying your first home or upgrading to your dream property, when done right, the day you buy is the day you make your money.

For me, the result was creating $1 million in equity instantly. For you, it could mean turning an overlooked property into the best financial decision of your life.