In this episode, Kevin unpacks the hard truth that real, lasting success is never handed out—it’s earned quietly, in the invisible moments no one sees. He contrasts two seasons of his own life: his coasting, complacent high school basketball career and his obsessive, behind-the-scenes preparation as a professional speaker. That contrast sets the stage for a deep dive into “micro wins” as the real engine of success. From there, Kevin walks through powerful examples like Jerry Rice and Steph Curry to expose the myth of “overnight success” and show how tiny, consistent repetitions are what actually create legendary performance. Steve then jumps in with the story of his daughter’s hockey journey to illustrate the cost of excellence and how focusing on one calling often means sacrificing others—just like DFY’s quiet, years-long grind behind every “simple” turnkey property. The second half of the episode turns that same principle toward real estate. Kevin systematically dismantles common “good deal” myths—price, instant equity, cap rate, and even cash flow rules like the 1% rule—and replaces them with the Moneyball Real Estate lens: focus on purchase-worthy properties that are easy to own, sit in high-demand neighborhoods, and create small, sustainable wins over time. He reframes even negative cash flow as retirement funding when viewed through the long-term wealth lens. The chapter ends by defining what makes a true “Moneyball” single-family property and sets up the next chapter: zooming out from the property to the market.
00:00 – 02:23 | Success is earned, not given & Kevin’s two careers
Kevin introduces Chapter 6 and the core principle: invisible moments culminate in visible results. He contrasts his complacent basketball years with his hyper-prepared speaking career to show how effort (or lack of it) shapes outcomes.
02:23 – 04:49 | The fallacy of “overnight success” & Jerry Rice’s grind
Kevin breaks down Jerry Rice’s legendary work ethic—offseason workouts, brutal conditioning, and extra reps—to show that what looks inevitable on Sundays was actually forged in private.
04:49 – 07:13 | Steph Curry: practice in private, rewarded in public
Steph Curry’s story illustrates micro wins in numbers: millions of practice shots vs. thousands of made threes in games. Kevin shows how only a tiny fraction of effort is ever seen, but all of it is required.
07:13 – 09:36 | The cost of success & DFY’s invisible work (Steve’s segment)
Steve shares his daughter’s hockey journey—sacrifice, focus, and relocating for opportunity. He ties it to DFY, explaining how years of unseen work, failed attempts, and refinement sit behind the “simple” experience clients see today.
09:36 – 11:53 | Real estate application: purchase-worthy properties vs. “good deals”
Kevin transitions the principle into real estate. Success in investing is built on continual, quiet, expert effort to find purchase-worthy properties—not on flashy “deals” or lucky breaks.
11:53 – 14:15 | Myth #1: Price alone doesn’t make a good deal
He debunks the idea that “cheap = good.” Kevin walks through low-price, high-headache properties and high-price, high-risk ones, emphasizing that stress, time, and tenant issues must be part of the equation—not just numbers on paper.
14:15 – 16:34 | Myth #2: Instant equity and the “you make your money when you buy” mantra
Kevin dismantles instant equity as a universal goal, explaining that the “discount” often shows up later as rehab costs, time, or risk. He explains why flipping is a different game and not aligned with Moneyball’s consistent singles strategy.
16:34 – 21:22 | Myth #3: Cap rate as the ultimate metric
He breaks down what cap rate really measures, how it can actually go down as values go up, and why relying on it as a be-all-end-all metric is dangerous—especially when you’re using leverage.
21:22 – 26:08 | Myth #4: Cash flow & the 1% rule in changing markets
Kevin explains the 1% rule, then shows how it was born in a very specific post-2008 context. He uses a 10-year example to illustrate how strict cash-flow rules could make investors walk right past six-figure opportunities.
23:44 – 28:34 | Rethinking negative cash flow as retirement funding
He reframes a small monthly shortfall as an intentional contribution to a long-term wealth-building vehicle. Negative cash flow becomes a strategic “retirement payment” into an appreciating, debt-paydown asset.
26:08 – 30:57 | The Moneyball approach: purchase-worthy > “good deal”
Kevin introduces Moneyball Real Estate’s core lens: focus on high-demand, middle-class neighborhoods and properties that are easy to own and manage. He defines “purchase-worthy” properties and explains why market value, not just appraised value, matters.
30:57 – 33:21 | The ideal Moneyball property & tenant profile
He outlines the target property type (3–4 beds, 2 baths, 2-car garage, middle-income areas near amenities) and why property managers love this sweet spot. It attracts stable tenants and keeps headaches low—key to long-term success.
33:21 – End | Idea summary & micro-win action steps
Kevin recaps the chapter’s core ideas and offers three micro-win challenges: recognize your own invisible progress, upgrade how you define a “good deal,” and start identifying high-demand, low-supply opportunities that align with the Moneyball mindset.
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Chapter 6 Success is earned, not given. General Principle Invisible moments culminate invisible results. Contrasting Successes Kevin here. I've already shared some personal anecdotes about two different phases in my life. My basketball career and my speaking and author career. The latter of which I'm still in the midst of as evidenced by the book you are now listening to.
My basketball career was lackluster to say the least, largely because I became complacent after a few early successes and stopped putting in the effort to improve. One of the highlights of my short-lived basketball career was the MVP trophy I earned when I was in the fifth grade. Another was the time I had a dribble off with the star of the local high school team and one using a fancy maneuver I'd perfected known as the spider.
Unfortunately, these early experiences made me think, Kev, you're amazing at basketball. And I stopped trying. Fast forward to my junior year and I barely made the varsity team. Then I didn't start a single game until the last game of my senior year. And that was because it was senior night and there was only five of us. So was pretty easy to start me that game. The game I started, I had minimal impact, scored a whopping six points and thought.
What if I hadn't believed that I was already amazing at basketball? Would I have actually dedicated myself over these last five years? I had some natural talent, but it was unrealized because I didn't think I needed to try. I thought I was okay. And then I spent years wondering why I wasn't starting, let alone scoring more. Much later, I took the opposite approach to my speaking career. Now I spend hours conducting research and interviewing people
to prepare for a single talk. I then spend hours writing it, always starting fresh for a new audience, even if I'm sharing the same message I've shared 100 times before. I also spend hours practicing the talk in my bedroom, in my basement, in my car, so much so that my wife can't drive with me to an event because all I do is loudly rehearse on the way. And the result of all this effort is that I've seen the kind of impact powerful thoughts and words can have on audiences
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across the country. The contrasting results from these two experiences highlight a key principle. True success cannot be handed to you. It must be earned. If success is simply given, it can actually be demotivating as it creates an illusion that achievement is a given, not something that necessitates work and effort. This brings us back to the concept of micro wins.
which we have discussed throughout the book. These are the countless unseen efforts, the small steps towards success that go unnoticed by others. They're not glamorous, but they're the bedrock of your success. They are the invisible foundations that ultimately help you achieve the success you yearn for. The same principle applies to real estate investing. It requires a tremendous amount of knowledge, expertise, and the relentless pursuit of purchase worthy properties.
It involves numerous micro-winds that stack up over time to culminate invisible, tangible success. The Fallacy of Overnight Success. The notion of quote unquote overnight success often creates a sense of wonder. It might make you ask, do these people have access to some sort of shortcut unknown to the rest of us? Take the example of Hall of Fame wide receiver Jerry Rice.
He came from Mississippi Valley State, a mid-level football school and was the 16th overall draft pick. His rookie season was far from spectacular, but by his second season, he was already making waves. He went on to play 20 extraordinary seasons in the NFL, primarily with the San Francisco 49ers, setting several records, including the most touchdowns and receiving yards in the history of the league. While to the millions watching him, Rice's success might've appeared inevitable.
But it was actually the culmination of countless unseen efforts. A short excerpt from Jeff Colvin's book, Talent is Overrated, provides a glimpse into Rice's typical training regimen. It states, quote, in team workouts, he was famous for his hustle. While many receivers would trot back to the quarterback after catching a pass, Rice would sprint to the end zone after each reception. He would typically continue practicing long after the rest of the team had gone home.
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Most remarkable were his six days a week off season workouts, which he conducted entirely on his own. Mornings were devoted to cardiovascular work, running a hilly five mile trail. He would reportedly run 10 40 meter wind sprints up the steepest part. In the afternoons, he did equally strenuous weight training. These workouts became legendary as the most demanding in the league and other players would sometimes join Rice just to see what it was like.
Some of them got sick before the day was over. What may seem like quote unquote overnight success is typically an accumulation of countless invisible moments, each in its own distinct micro-win, piling up one after another until they culminate in the visible success recognized by others. Practice in private, get rewarded in public. Stephen Curry, renowned as the greatest shooter in basketball history, is not just
the star of my personal favorite NBA team, Golden State Warriors, but a testament to the relentless pursuit of excellence through micro wins. Curry's journey from his collegiate days at Davidson College, where he was dubbed the baby face assassin, to being selected as the seventh overall pick by the Warriors in 2009, to achieving the status of the NBA's first unanimous MVP and going on to win multiple championships along with a finals MVP award represents the classic tale of an underdog
triumphing against all odds. The foundation of Curry's success was laid in his youth, sharpening his skills on a homemade hoop at his grandfather's home in rural Virginia. This rustic setup, a utility pole for a stand, a fiberglass backboard, and a rigid steel rim posed unique challenges that honed his precision and adaptability. Each shot required careful calculation and adjustment, laying the groundwork for the extraordinary three-point shooter he would become. Tony Robbins points out that Steph Curry
takes 500 practice shots a day, which add up to more than 2.5 million shots across his 15 NBA seasons. Yet from the nearly 17,000 shots he's attempted in games, it's the close to 3,700 successful three pointers that have truly defined his legacy. This reveals that the public has seen just a tiny fraction, six thousandths of a percent of Curry's practice efforts. Remarkably,
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Only a mere one 10th of 1 % of all the shots he's taken, both in practice and games over 15 years have made him the greatest shooter in the history of basketball. This staggering ratio underscores a powerful principle. The accolades seen in public are the result of countless unseen micro wins stacked in private. Curry's narrative vividly demonstrates that it is a silent, disciplined accumulation of small victories.
each practice shot, each adjustment for accuracy that paves the way to visible success and legacy. His journey is a compelling illustration of our book's core message that the path to achieving your goals in real estate or any endeavor is built on the foundation of micro wins quietly stacked away from the public eye, yet monumental in crafting one's ultimate triumph.
Cost of success. Hi, Steve here. When my daughter decided to take up hockey seriously, she spent countless hours on the ice, striving to match or even exceed the performance of her male peers, who were naturally larger, faster, and stronger. After years of dedicated practice and skill honing, she emerged as a leading player among those teams. Recognizing the limitations of progressing in the sport in our region, she finished her last two years of high school in Pennsylvania and was offered to play
college hockey after graduation. She even earned the position of the team's head coach post-college. However, this accomplishment didn't come without its sacrifices. My daughter had innate talent in both gymnastics and singing, but she chose to put these aside and dedicate her full attention to hockey. Success often means giving up a balanced life. The extraordinary time invested in one particular area implies that you might have to let go of other pursuits, at least temporarily.
Most of us are not born with a silver spoon, which implies that to achieve success, we need to continually place ourselves in situations where we can learn, make mistakes, and grow. This could mean associating ourselves with people who share our ambition, attending workshops, spending extra hours after training, dedicating our evenings and weekends to skill refinement, essentially doing what most people aren't prepared to do. And this typically comes at the cost of sacrificing other pursuits.
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There have been numerous instances when a prospective DfY client, during an initial phone conversation, expresses complete surprise about never having heard of us before. They shoot off questions like, how long have been doing this? Why has no one ever mentioned you before? Where did you guys come from? How have you maintained your success over the years despite the market's wild fluctuations? While these are valid questions, they reflect the illusion of overnight success that they perceive.
They aren't aware of the innumerable hours we've spent with our teams in the field. They don't know that it's taken us over a decade to perfect our property valuation method, that we've made thousands of adjustments to spreadsheets and specialist property analysis based on the realities of thousands of properties that we've helped our clients purchase. They are unaware of the tens of thousands of hours spent in meetings with our leadership team, with external experts, in masterminds with our industry leaders.
devouring articles, research, and hundreds of books to establish and operate a company that employs extraordinary individuals who go above and beyond for our clients. They don't see the numerous deals that we evaluate and reject for every property we present to our client as a purchase-worthy property. It is often said that, in business and in life, you are publicly rewarded for the work you've done and the sacrifices you've made in private. Fortunately,
You don't have to give up your social life or retirement dreams to achieve economic independence because we've already spent years of learning, failing and growing. Continue reading to find out what myths we've debunked over the years so that you can fast track your success in real estate. Real estate application of principle. Locating and investing in purchase worthy properties time and time again takes a tremendous amount of knowledge and expertise
performed during quiet yet continual applied and arduous effort. Redefining the good deal in real estate. If you took a moment to ask a number of real estate investors about what constitutes a good deal, you would likely encounter some standard answers accepted and echoed within the investor community. Answers like, should be below a specific purchase price, or it must have a certain amount of equity, or maybe it needs a specific cap rate, or
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The rental income should be a set percentage of the purchase price. Although these general guidelines can sometimes be useful to determine if a property merits further investigation, we argue that these traditional metrics are not the most effective way to assess a deal from the perspective of the moneyball mind. None of these measures take into account the ease of acquiring, owning, maintaining the property, or the potential headaches of managing real estate and dealing with tenants. These benchmarks are arbitrary.
It may sound unconventional, but monetary considerations alone should not be the primary determinant of whether a deal is worth buying. We take into account factors like the local economy, the type of tenants attracted to the area, and even the local weather and climate conditions. In fact, we examine, measure, and evaluate more than 30 different criteria to determine if a given real estate market will generate the kind of small incremental wins essential to long-term sustainable success in real estate.
And most of these criteria don't fall into the broadly accepted metrics what others might classify as a quote unquote good deal. Yet all of them impact the ease of maintaining the property and keeping it rented out. Let's consider our esteemed client, Kelly. She gained a comprehensive and pricey real estate education from a well-known expert before collaborating with us at Dunfue Real Estate. Fortunately, her education is proven valuable.
as Kelly's real estate portfolio is impressively diverse, comprising both single family and multifamily properties. Kelly owns more than 20 properties. While she possesses the necessary knowledge and skills to manage both types of investment, she's found that managing multifamily properties requires significantly more effort than the single family properties she's bought and owned through us. This is not to imply that one form of real estate investment is inherently superior to the other,
But the amount of time, energy, financial resources and expertise needed significantly varies. We find it somewhat amusing considering most multifamily advocates would argue quite the opposite. Kelly is not alone in asserting that. For busy professionals like her, what makes a good deal depends as much on the personal time and energy required as any other traditional real estate evaluation metric. Take another client of ours, Court, as an example. He approached us with prior experience in commercial real estate for retail.
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As he was nearing retirement, he sought to diversify his real estate portfolio to increase his cashflow while decreasing his risk and the time spent managing his assets. Court had owned a strip mall for so long that the tax benefits of depreciation were soon expiring. Reminder, depreciation is the process used to deduct the costs of buying and approving a rental property spread across the property's useful life rather than being a one-time tax deduction upon purchase.
After developing a meticulous plan with his D.F.Y. listed his strip mall. Finding a buyer and closing the deal took over a year of determined effort, but eventually Court was able to exchange his strip mall for 18 single-family residences in four different cities across four states, all within the 180-day deadline from the time he closed on his strip mall's sale. Court increased his cash flow by nearly 30%.
had 18 properties for ongoing maximum tax benefits through depreciation and as a cherry on top, never had to set foot in any one of those 18 properties. With his time freed up, his retirement started in earnest, mission accomplished. We emphasize the case of ownership because our strategy's purpose is to fund retirement, not to create another full-time job as a real estate investor. We haven't heard anyone else in the industry define a...
good deal as we do and we're excited to share our unique perspective with you. In fact, we don't even refer to these investment properties as good deals. We call them purchase worthy properties. To adequately describe what constitutes a purchase worthy property, we need to dispel the common misconceptions of what makes a good deal. Debunking real estate myths, price. Imagine stumbling upon a deal for less than $100,000 that brings in $1,500 a month in rent.
On the surface, sounds enticing, right? If finances were the sole deciding factor, you might be ready to jump right into this investment. But what if we revealed that the property is located in a problematic neighborhood and requires a minimum of $50,000 in repairs to make it rentable? Suppose your property manager informs you that you may go through three or four sets of tenants each year, and each one typically causes $20,000 worth of damage before vacating the property.
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Not to mention the house is over a century old, suggesting that the maintenance costs will be substantial. Does it still seem like a good deal now? I mean, perhaps. It might still make financial sense, but do you possess the mental, emotional, physical, and temporal resources necessary to manage it effectively? At times, the stress of owning a specific property in a certain location
simply because the cost looks attractive on paper is unequivocally not worth the hassle. Price often reflects value. A property with an unusually low price is likely priced so for a reason. Conversely, a high-priced property may not necessarily offer the best returns. Consider this. You find a $2 million property in excellent condition that for some inexplicable reason, you can buy for $1 million.
Sounds like a golden opportunity, Absolutely, if you can afford the mortgage on a $1 million loan, which would be around $13,000 with taxes and insurance at a 6 % rate. Now, if you can't afford this mortgage, or if you cannot resell the property for more than the purchase price before your first payment is due, then it's a terrible deal. If you fail to rent out the property immediately, you'll be hemorrhaging $13,000 for each vacant month. And from our experience,
There aren't many tenants willing to shell out more than 10 grand in rent. Your potential buyer and renter markets are both miniscule in that situation. The situation embodies the swinging for the fences level of risk, which is not what we advocate here at Team Moneyball. Cost, considered an isolation of other factors, is not a reliable indicator of a property's worthiness for purchase. Debunking real estate myths. Equity.
Many people associate a good deal with purchasing a property that carries a certain amount of equity, which means acquiring it at a lower cost than its market value. We often hear the guru's mantra, you make your money when you buy the property. Let's debunk this myth. The notion of instant equity is fundamentally flawed. A property will only sell for what someone is prepared to pay for it. Therefore, if you're paying less than what comparable properties in the neighborhood are fetching,
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it's likely the money you're saving will surface as a cost elsewhere. Consider this scenario. You're buying a house in an area where the median cost is $250,000 and the property you're interested in costs $200,000. This $50,000 difference is not magical equity. It's probable that the house requires around $50,000 worth of work. The actual equity in this situation hinges on your ability to complete that work for significantly less than market cost.
This strategy is what house flippers, armed with their own construction skills and equipment, employ. It's glamorized in the industry because people relish the idea of snagging a bargain property, investing some elbow grease, and selling it for a hefty profit. However, just because it appears lucrative and is often portrayed by glamorous personalities equipped with a full makeup and hair team and a production crew does not reflect the true reality of property flipping. The truth is that a house only increases in value
if the necessary improvements are carried out correctly and at a cost lower than the market rate. Reality shows only represent a fraction of the work genuinely required. The real work demands a substantial investment of time, skill, experience, and risk. It's not a strategy that aligns with the moneyball philosophy when your goal is to consistently make successful small gains, especially if you're not a professional flipper. Even if you can identify a property with genuine instant equity,
that doesn't automatically signify a good deal for you. We've discovered that you don't make your money when you buy a property or even necessarily when you sell it. You make your money when you hold onto it. You earn your profits by hitting real estate singles, not by trying to step up to the plate and knock one out of the park because you've managed to secure a deal for $20,000 or more below market price. Debunking real estate myths, cap rate.
Through our interactions with prospective clients over the years, we've noticed that many budding real estate investors have heard the term cap rate, perhaps in a book highlighting its significance and assume it applies universally to real estate investing. They often post questions like, your properties look appealing, but what's the cap rate? So what do people imply when they discuss cap rate? Cap rate, also known as the capitalization rate, is derived by dividing a property's net operating income
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by the property's value. Suppose you own a property with $200,000 that nets $1,666 per month after all expenses. This property would roughly yield a 10 % cap rate. The equation would be monthly net income times 12, number months in a year, total annual income, $1,666 times 12 equals $19,992. Next equation, total annual income divided by value of property,
equals cap rate as a decimal. So $19,992 divided by 200,000 equals 0.1. Cap rate as decimal times 100 equals cap rate as percentage. 0.1 times 100 equals 10%. That's how we get the 10%. If the value of this hypothetical property rose by 10 % over the following year, but the net income only increased by 3%,
the cap rate would be affected. In the second year, you would own a property worth $220,000 that generates $1,716 monthly, resulting in a cap rate of just 9%. Therefore, a property that appreciates in value and sees a minor income increase ends up having a lower cap rate than when it was initially purchased. If you regard the cap rate as the ultimate indicator of property valuation, then you're investing all your confidence in a metric
that deteriorates as your property appreciates. While cap rate can be a handy tool for quickly comparing the relative value of similar real estate investments in the market, it shouldn't be the sole indicator of investment strength. The cap rate does not account for leverage, the time value of money, and future cash flows from property improvements among other factors. It merely represents the yield of a property over a one-year period, assuming the property is purchased outright and not financed.
When investors mention cap rate, they're often inquiring about the cash on cash return, which in any given year is the total net income a property generates divided by the amount of capital used to purchase that property. This metric is more suitable for leveraged purchases, which is what we advocate with the moneyball real estate approach. However, the cash on cash return also has its limitations. It represents a single metric and generally only indicates net monthly cash flow.
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One of the reasons we're enthusiastic about real estate is because it can generate profit in multiple ways. By focusing solely on cash on cash, you could overlook a property that could outperform one with a superior cash on cash return over time. To fully debunk the misconceptions surrounding cash on cash and cap rate, we should delve deeper into the limitations of evaluating property based on cashflow alone. Debunking real estate myths, cashflow.
For many years, we've emphasized the significance of cash flow, the net amount of money you make each month as a primary profit factor in any real estate transaction. However, just like other indicators, cash flow has its limitations when it's the only figure under consideration. A perfect illustration of this is the 1 % rule. The 1 % rule is an antiquated real estate guideline suggesting that a property is worth purchasing if the cash flow is 1 % of the purchase price.
This percentage is calculated by dividing the purchase price of the property by the total annual rent. If you bought a house for $100,000 and collected at least $1,000 monthly in rent, you would meet the 1 % criteria. While this is easy to compute, the 1 % rule was devised in a substantially different market. Following the 2008 financial crisis, house prices plummeted faster than rent amounts.
leading to favorable rent to price ratios. However, as house prices began to rebound, rental rates failed to keep up, and even worthwhile investments did not meet the 1 % threshold. Suppose you bought a home for $85,000 in late 2009 with an existing tenant locked into a contract paying $1,200 monthly until their rental contract renewal. This rent, representing nearly 1.5 % of your purchase price,
would yield a much higher cashflow than the previous owner who owned the property when it was valued at $200,000. After renegotiating the rental contract, your renter would pay $1,000 a month, still above 1%. Fast forward 10 years, you've been raising rent by 5 % each year, so your monthly rent is now $1,500, but the property's value has risen to $250,000. However, a prospective investor passes up the property
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because the 1 % rule no longer applies. For the purchase to make sense for them, they would need to rent it for at least $2,500 a month, which is significantly more than the $1,500 you've recently rented it for. Had the investor assessed the property in light of the 2019 economy using Moneyball real estate principles, they might have bought the property. If they had, they could have seen over six figures in appreciation as values increased between 15 and 20%.
from 2019 to 2022. This illustrates the importance of understanding that what might be deemed valid knowledge during a specific market cycle may not hold relevance in future market cycles. What was considered a benchmark in 2011 cannot reasonably serve as a benchmark in 2021 or 2031 for an active real estate investor. We'd even argue that depending on the market scenario, cash flow might not matter at all.
The other aspect of cashflow we've touched on briefly, but still bears repeating, revolves around the idea of negative cashflow. Often real estate investors balk at the thought of negative cashflow, and it's usually seen as a sign of a poor investment. However, within the framework of Moneyball Real Estate, we invite you to reconsider this perception and possibly view it as constructive retirement funding. Imagine you're purchasing a property with a monthly shortfall of $200.
While this might seem like a negative scenario, let's flip the perspective. Instead of viewing it as a loss, see it as you consciously contributing $200 each month towards your retirement asset. After all, this money isn't disappearing. It's going into an appreciating asset that's likely to increase in value over the long term. The ultimate goal of real estate investing is to build wealth over time. The monthly contribution you're making is helping to pay down the mortgage, thereby increasing your equity in the property.
At the same time as the property appreciates, you stand to gain significantly when you decide to sell it in the future. At the same time as the property appreciates, you stand to gain significantly when you decide to sell it in the future. In this way, a scenario with negative cash flow can potentially turn into a highly positive financial outcome in the long run. Remember, successful real estate investing isn't just about immediate cash flow. It's about long-term wealth creation.
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By adopting this changed perspective, you can find value in properties others may dismiss and expand your portfolio in a way that builds solid wealth over time. Having debunked some prevalent real estate buzzwords and misconceptions, let's now delve into the principle-based, recession-proof, financially viable in any economy type of moneyball real estate. This approach aims to replace your income one property at a time, over time.
largest supply with the highest demand. Indeed, the bedrock of the moneyball real estate approach is anchored in the age-old principles of supply and demand. The emphasis is on owning property where demand is persistently high, particularly in high-quality neighborhoods that appeal to the vast middle class of the United States. Under this strategy, a property's potential is not gauged solely by the usual metrics indicating a good deal.
Instead, it's about the caliber of the purchase and the significance lies in buying at the prevailing market value. A real estate single under money ball real estate, meaning an investment worthy single family rental property that sold at market value doesn't necessitate extensive repairs or rehabilitation apart from the usual minor fix ups like carpet replacement, repainting or rectifying cosmetic damage. Here's an important note to consider.
Market value is not synonymous with appraised value. In our perspective, every property carries three distinct price tags. The listing price or the initial price the seller seeks, the appraised price or the value assigned by an appraiser, and the market price or the sum a buyer is willing to pay, which is the most accurate reflection of a property's real value. The market value is the final price paid by the buyer.
regardless of whether it's higher or lower than the appraised value. While the appraisal performed by a licensed appraiser is vital, especially when using leverage to acquire the property, the market value is critical. It's this price that dictates how much of your own capital you will have to contribute at the closing. Generally, lenders won't extend a loan exceeding the property's appraised value. So if your offer surpasses the appraisal,
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you'll need to fund the difference on top of the mandatory down payment. But remember, the potential long-term growth of a property may well outweigh the upfront cost during certain market conditions. A money ball property is more than its price tag. It's also about the right size and location. We usually target three or four bedroom houses with two bathrooms and a two car garage. This property type attracts a broad range of renters and potential buyers.
offering you ample options for renting now and selling later. Moreover, it needs to be in middle income neighborhood that's desirable, so it's near stores, schools, etc. This is where the majority of Americans aspire to live. Hence, you're simply targeting the supply where demand is the highest. A moneyball property also appeals to the kind of tenants that property management companies want to deal with. Property managers prefer low maintenance properties where tenants take good care of the house, reducing repair costs and complaints.
This makes the process more profitable and less labor intensive for them. It's a win-win scenario. Of course, it's possible to succeed in investing in lower priced or low income properties. Many do. However, such investments demand a different mindset, tool set, analysis, and management style compared to our approach. The Moneyball real estate strategy has been proven effective for us and our clients since 2008 due to its focus on properties that require
the least amount of time and effort to manage. By understanding that each small action you take builds upon the last, you position yourself for success. It's the accumulation of these micro wins, these seemingly invisible moments of effort that lay the foundation for your victorious outcome in real estate investing. As we wrap up this chapter, we hope you've gained a sense of the depth of knowledge and expertise required to consistently locate and invest in purchase worthy properties.
However, remember that the property itself is only part of the equation. Next, in chapter seven, we'll widen our lens to examine a factor that's just as critical to your investment success, the market. Remember, the micro perspective of choosing the right property is only half the picture. The macro view, understanding and selecting the right market, provides the broader context in which these individual properties exist. By mastering this principle,
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You will be well on your way to developing the comprehensive perspective necessary to make the most informed and lucrative real estate investment decisions. Chapter six, ideas summary. Number one, understand that what appears to be overnight success usually stems from years of consistent applied effort. There are no shortcuts to sustainable achievement, especially in real estate. Number two, embrace a comprehensive approach to real estate.
considering over 30 different criteria, including local economy, tenant types, weather, and climate conditions. Recognize that conventional wisdom might overlook essential factors for long-term success. Number three, move beyond common metrics like low price and built-in equity. Instead, evaluate a property's potential for small incremental wins, focusing on ease of maintenance and rental sustainability. Number four,
Understand the critical principle of investing in properties where demand is high and supply is limited. This ensures that your investment aligns with market forces, enhancing its potential for success. Chapter 6, micro wins. Number one, recognize your incremental progress. Reflect on your own journey and identify the small victories that have contributed to your current success. Acknowledging these incremental wins helps you appreciate the process.
and motivates continued growth. Number two, evaluate your criteria for a good deal. Have you been relying on traditional metrics to define a good real estate deal? Assess your criteria and consider expanding them to include factors beyond price and cap rate. This more nuanced perspective is a micro win in crafting a sustainable strategy. And number three, identify a high demand, low supply opportunity.
Can you pinpoint a potential investment where demand is robust and supply is scarce? Identifying such an opportunity and recognizing its significance is a valuable micro win that aligns your investment with market trends.