My Real Estate Strike Zone

Batting over .400 is legendary.

Apparently, one of his secrets was he ONLY swung at balls in his favorite spots over home plate.

This allowed him to basically invent his own personal strike zone.

By doing this, he only struck out 27 times that year.

For me, having a narrow “strike zone” has built me a $1.5 billion dollar real estate empire.

Everything I do in real estate is based on the idea that the American dream of homeownership is dead, and everyone is going to be moving to apartments over the next 20 years.

Millennials don’t want the responsibility of a home and Boomers want to downsize.

But I don’t just buy any apartments...

When it comes to investing in real estate assets, my strike zone is extremely narrow.

In fact, my “strike zone” is apartments across the Sun Belt where rents average $1,100 to $1,300 per month.

Why?

Because everything else can very likely be a miss…and I’m not going to take a swing at a bad deal.

I put $3,000 down and I thought I was going to be a real estate mogul by renting it out.

I think I was making about $180 bucks a month. I said, ‘Oh man, I am going to get rich doing this.’ Then the tenants moved out about five or six months after living there.

Then I realized I was responsible for the payment of the house.

I sold that house as quickly as I could — STRIKE ONE.

On a side note, when it comes to investing, single-family homes are wild curveballs high and outside, you are swinging at something that most likely is NOT going to be a homerun financially speaking.

After that first bad deal, I was going to wait for the right pitch, so I studied real estate for 3 years and realized that multi-family apartment deals were the BEST kind of deals to get into.

I took a swing at a deal in the mid-1990s in San Diego, California with 38 units and a cost of $1.9 million.

I sold that deal a few short years later with a massive profit + I cash flowed each month while I was waiting for that property to appreciate — which it did.

Over the next 2 decades, I learned more and more about the right kind of deals vs. the WRONG kind of deals, because even when it comes to apartments, not all deals are created equal.

I stopped swinging in markets like California because they are so tenant-friendly that I can’t move a non-paying tenant out. And if I can’t move a bad tenant out, then I can’t take care of the property and all of my good tenants.

You’ve got other problems in California too, like water, trash, and high taxes.

I like places that have job migration — think Orlando and Austin.

Places like California and New York don’t have positive job migration so they aren’t in my strike zone anymore.

Don’t take a wild swing on your own — just as it’s difficult to bat .400 in the major leagues, it’s difficult to find the right deal when you go at it alone.

Be Great,

Grant

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