Is Luxury Real Estate a Good Investment?

How to Analyze a Luxury Home

By Larry Goins

I want to talk about luxury homes for a minute as I get a lot of inquiries about investing in them. Now a luxury home by definition will vary depending on the area. In Orange county California where the median priced home is almost $800,000.00, a luxury home would have to be at least several million dollars to be classified as a luxury home in my opinion. Where as in my area the median priced home is in the $200,000.00 range then a luxury home would be anything around $1,000,000.00. Many investors, especially new investors, call me or email me with a luxury home that they have found and are real excited about because they think it is a real good deal. For example, I had someone recently email me a deal that was worth $1,000,000.00 and they could buy it for $800,000.00. Even though it looks like there is $200,000.00 in profit to be made I want you to realize that with luxury homes you must buy them at a larger discount simply because the values of a luxury home can change so much. I have seen the value from appraisal to appraisal change as much as 20%. In the example above… there goes ALL of your profit. My solution to this, which I actually learned from luxury home expert Frank McKinney, is that you need to be able to buy a luxury home at no more than 50% of its value to make a good profit on it. This is because there is less of a market for a luxury home making them harder to sell and because of this they can vary in price quite a bit. Please keep this in mind and don’t get too excited when you can get a luxury home at a 20% discount. That’s a good place to start but you need a better deal than that. Don’t think that you can’t buy a luxury home at 80% and retail it and make money on it. That’s not what I am saying at all because there are more things that also come into play here. If you are in a hot market and you know you can sell the property fast at retail and you are totally comfortable with the appraised value then you can make money on an 80% deal. Just remember luxury home values can change fast and there are fewer buyers for them.

If you would like to learn more about luxury home investing from Frank McKinney just go to www.brainpickapro.com and scroll down to find Frank and you can listen to me interview him.

I also interview a different speaker each and every Wednesday
night at 9:00 pm Eastern. The number to call into is 646-519-5800 and enter pin number 0011#. You can also listen to an interview I did with luxury home expert Marco Kozlowski where he shared how he buys and sells luxury homes with only $100 invested and sells them by auction. Once again just go to www.brainpickapro.com and scroll down to find Marco Kozlowski.


I hope you have enjoyed this article taken from my course called the Ultimate Buying and Selling Machine! which teaches how we buy and sell 5-10 properties a month, have them sold in less than 2 hours and never leave the office or look at them. For many more articles and a 10 part ecourse on how to create your own Ultimate Buying and Selling Machine! as well as over 50 training audio recordings you can listen to online, download and collect, simply go to www.LarryGoinsFreeOffer.com where you will gain instant access to all of this and 51 Exclusive Editable real estate investing Forms and Documents all FREE! You will also get two FREE real estate investing eBooks, A free Personal Coaching Profile to help you jump start your real estate Investing, FREE Nationwide Wholesale Property Listing Notification, FREE Weekly Training Teleconferences with Different Topic Each Week, FREE subscription to Larry Goins “Almost” Weekly Investing Newsletter, FREE Admission for Two to Investor Palooza 3 Day Training Event, FREE Admission for Two to Larry Goins 3 Day Boot Camp, Plus over 31 Exclusive Articles on real estate Investing and Much More! Just go to www.LarryGoinsFreeOffer.com. Thanks and I look forward to working with you, Larry Goins