Berkshire Hathaway Chairman and CEO Warren Buffett knows how to make a profit, apparently even when it comes to real estate. According to a CNBC report, a Laguna Beach, Calif, vacation home he purchased in 1971 for $150,000 is now on the market for $11 million. Even more surprising is the fact that Buffett took out a 30-year mortgage when he purchased the home, with features 6 bedrooms and 7 bathrooms.

Warren Buffett selling home in Laguna Beach.

“When I bought it for $150,000, I borrowed some money from Great Western Savings and Loans. So I probably only had $30,000 of equity in it or something like that – it’s the only mortgage I’ve had for 50 years.”

Buffett also explained that he thought he could probably do better with the money than have it be an all equity purchase of the house. It turns out that he was right.

“That $110,000 or $120,000 I borrowed, I was buying Berkshire then.”

Like many Americans, real estate helped fuel Buffett’s wealth. Throughout the 1970s, he was frequently purchasing Berkshire stock, which was around $40 a share.

“I might have bought 3,000 shares of Berkshire or something like that from the proceeds of the loan — so that’s [worth] $750 million [today].”

In the case of most Americans, a home is the most expensive investment they will ever make. According to Buffett, it is a tremendous investment for a family that plans to stay in the same area for many years. The 30-year mortgage helps make it an attractive investment.

“If you get a 30-year mortgage it’s the best instrument in the world, because if you’re wrong and rates go to 2 percent, which I don’t think they will, you pay it off. It’s a one-way renegotiation. I mean it is an incredibly attractive instrument for the homeowner and you’ve got a one-way bet.”

Would it surprise you to know that this legendary CEO’s main home is in Omaha, Nebraska, rather than a big coastal city?  According to Buffett, “don’t expect to see that on the market anytime soon.”