In this episode, Kevin and Steve unpack Chapter 7 of Micro-Wins to Millions, showing how perspective shapes every financial decision you make—especially in real estate. Steve opens with a powerful personal story: a Labor Day bike ride that suddenly turned into a life-or-death moment when his wife suffered a heart attack. A nearby child saw only a “cool tandem bike,” revealing just how wildly different perspectives can be in the same moment. From there, the guys explore how perspective affects your investing journey. They use the analogy of a dark conference room—same obstacles, same stakes, but turning on the lights changes everything. Then they apply this idea to real estate: choosing markets, identifying purchase-worthy properties, and evaluating long-term potential. They break down the four pillars of investment scoring—economics, demographics, geography, and investor friendliness—while reminding listeners why fulfillment matters more than frenzy. This is perspective turned into profit.
In this episode:
Steve shares the unbelievable story of his wife’s sudden heart attack during a mountain bike ride—and the surprising perspective of a young boy who noticed only the “awesome bike.”
Why perspective is a light switch you control, especially when the path toward your financial goals feels dark or overwhelming.
The conference room analogy that reframes how to approach your financial journey—with or without guidance.
How perspective directly influences market selection in real estate.
Why focusing on the right property matters more than falling in love with a geography.
A guided walk-through of the four major categories in DFY’s investment score:
Economics
Demographics
Geography
Investor Friendliness
Why fulfillment—not hustle, not comparison—is the real heartbeat of the Micro-Wins mindset.
Kevin Clayson (00:00.217)
Chapter 7. Keeping Proper Perspective General Principle Shift your view to reveal success. Perspective is a funny thing. Steve here. One brisk Labor Day, my wife and I embarked on a scenic ride up a canyon on our tandem bicycle. We set out early, enjoying the tranquility of the early morning and the shared effort of the uphill journey. We took a breather at a waterfall before we began our easier descent.
Several miles down, we veered off the mountain trail to relish the landscape around us. Suddenly, my wife complained of a tight, sore feeling in her left arm. Assuming it was just the strain from our uphill ride, I suggested it was likely due to her pulling hard on the handlebars. But then, the discomfort intensified. Her arm pain was joined by an alarming tightness in her chest. At that moment, I realized my wife, a healthy 42-year-old woman, was having a heart attack.
We were hidden from view hundreds of yards away from the main bike path and I'd left my cell phone at home. Panic began to rise within me as I faced an unthinkable choice. Leave my wife alone and run for help or stay with her and prepare to administer CPR. Just when my anxiety hit a peak, I heard a voice behind me. Is everything okay? A man and his two young boys had cycled up to us. While explaining our predicament, a timely sheriff pulled up, quickly assessed the situation and called for medical support.
The ambulance arrived in no time and our bike-saving stranger offered to take our tandem home, scribbling down his contact details for me to retrieve it later. My wife and I were then whisked away to the hospital where she underwent successful heart surgery. A few weeks after this traumatic ordeal, when my wife was well on her way to recovery, I contacted our bicycle rescuer. As I went to pick up our bike, he shared a poignant story. Upon returning home on that fateful day, his youngest son pulled him aside and with a sense of wonder said,
Today in the canyon, I saw something I thought I would never see. I had heard about bikes with two seats and extra handlebars, but I can't believe I actually saw one today. I missed a life or death crisis all that little boy noticed was the coolest bike ever. This is perspective in action. Our individual experiences, upbringings, beliefs, attitudes, and the plethora of content we consume, books, YouTube gurus, and the like,
Kevin Clayson (02:47.898)
Rediscovering perspective Let's consider a hypothetical scenario.
You're told that the objective you've been working tirelessly toward, the prize you've longed to grasp, is located just across the vast conference room. As you survey the room, you find it littered with tables, chairs, booths, and displays stretching out as far as the eye can see. However, just as you're beginning to carve out the best path forward, the lights abruptly go out. How would you navigate through this labyrinth?
in the darkness. Would the task be even more daunting if there was a time constraint? Now add the additional pressure of your financial future and that of your loved ones hinging on your successful journey through this ominous obstacle-laden room. Sounds overwhelming, doesn't it? This scenario is no more intimidating than the path you're about to embark on
to achieve your financial goals. The journey will inevitably be challenging and at times you might be tempted to throw in the towel. But remember, perspective can change everything. Revisit that dark conference room in your mind. Now imagine flipping a switch on the wall and flooding the room with light. The room's configuration remains the same. The ticking clock doesn't pause. The stakes remain sky high.
Yet with the lights on, wouldn't you feel a surge of confidence in your ability to navigate through the maze? This is the transformative power of perspective. With the lights on, your perspective undergoes a radical shift. The journey you need to embark on doesn't change, but with a renewed perspective and the darkness banished, hope springs anew. Picture having a guide who's navigated this room before, someone who knows the exact path to success and is willing to lead you through it.
Kevin Clayson (04:40.683)
So which option would you prefer? A journey that feels hopeless, challenging, shrouded in darkness and seemingly insurmountable? Or one filled with hope, possibility, illuminated by the bright light of perspective and guided by a seasoned expert? Both are within your reach and the choice lies in the flip of the perspective light switch. This is your key to unlocking success. With the concept of perspective thoroughly explored, it's time to bring it all into focus for our main event.
real estate investing. Just like navigating that dark conference room, building wealth through real estate investing also involves traversing a complex terrain. The real estate market is vast and varied, a seemingly endless conference room full of possibilities and pitfalls. But it's important to remember that the path to success is not about merely getting through this room. It's about finding the most profitable route. This route starts with selecting the right market, which leads us to the right
property, ultimately creating the right result. And in order to discern this path and make these critical choices, you need the right perspective. Therefore, it's crucial not to just light up the room, but to adjust our focus and enhance our perspective to understand how markets and properties interplay in the grand scheme of wealth generation. In the following sections, we'll delve deeper into the pivotal role perspective plays in choosing the right real estate market and consequently the right
property to set you up for success.
real estate application of principle. Choosing the appropriate investment boils down to maintaining the correct perspective. Concentrate on selecting the right market, which in turn leads to the right property, culminating in the desired results. Geography isn't the end-all be-all. Results are. Often the initial approach to property hunting revolves around zeroing in on specific markets. This approach isn't inherently flawed.
Kevin Clayson (06:35.863)
but it's crucial to not allow geography to dominate your selection process. If a property satisfies all the prerequisites for being investment-worthy, its geographic location in a hot market or otherwise is secondary. Prioritize a property-centric approach when contemplating additions to your portfolio. This viewpoint is counter to the ubiquitous location, location, location mantra that's typically associated with real estate. A geography-first dialogue might lead you to declare,
Let's invest in XYZ city, it's near the water, boasts great entertainment options and my family had a fabulous time when we visited. Your agent might then ask, great, so what type of real estate are you interested in investing in there? If your reply is, well, what good deals can we find? You're letting the cart lead the horse. Your agent might steer you toward attractive neighborhoods with moderately priced single family homes.
which could be suitable. However, such favorable outcomes aren't guaranteed when your primary focus is the location. Now imagine a different conversation, one where you specify, I'm seeking a single family home in the some hundred thousand dollar range, situated within a robust economic sector in a landlord friendly state. The location must have a vigorous rental market, but be predominantly owner occupied. I prefer a minimum of three bedrooms and two bathrooms with a two car garage and the home ideally is built
post 2000. It must be close to a substantial workforce with potential for industry growth. Additionally, it should align with current and projected migration patterns for the next decade. Extreme weather conditions are a no-go for both residential appeal and reasonable insurance rates. Also, I don't want the property taxes to be too exorbitant. Your agent, duly impressed by your acuity and detailed criteria, could now better curate potential investment properties. Setting specific criteria will channel your search toward markets that align with your objectives.
This approach focuses on the property's potential outcomes rather than its geographic location. The circumstances and results generated by the property are more crucial than its physical location. A note on where to invest. Our outlined criteria typically produce multiple concurrent markets that qualify as good investment regions. If you assume that all moneyball properties will yield positive long-term results, you might find yourself spoiled for choice. Suppose your appraising markets like Florida, Indiana, Tennessee, and Texas
Kevin Clayson (08:54.111)
all promoting lucrative returns, which do you choose? At times, one market may offer higher cash flows or another might present lower cash flows, but projected higher appreciation. A particular market might be better for new construction while another slightly pricier market could align with future migration patterns. However, when the investment worthy criteria are comparable, trust your instincts. The emotional satisfaction derived from your investment is essential for the long haul. Opt for a market that gives you that warm fuzzy feeling
safe in the knowledge that you've already covered the science and data specifics of your investment. Scouting the markets. In the same way, Billy Beans Moneyball Method revolutionized the evaluation and scouting of professional baseball players, we believe our unique approach to assessing purchase-worthy properties and broader real estate markets is instrumental in the resounding success of this investment strategy. How do we achieve this? Through thorough analysis, comprehensive assessments, and calculated scoring, we determine a market's investment worthiness. In other words,
we grade stuff. Investment score definition. This is a collected data set that provides a market with an overall risk rating based on population growth, job growth, unemployment rates, shifts in home prices, and current pricing evaluation. Access to this data is exclusive and costly. Before delving deeper, let's clarify a few points. The criteria listed below carry different weights. Not all are equally important and they should not be perceived as such. Similarly, not all data is created equal.
Our team relies on reputable data sources and our own data collection. However, data's reliability hinges on effective collection contingent on multiple factors beyond any one individual's control. Hence, we utilize various sources to inform our market research. This is something to remember if you're contemplating conducting your own market research. Some of the factors below might seem redundant, but they possess subtle differences, often discernible only to those with the appropriate expertise.
Thus be cautious not to bundle criteria together simply because they appear alike. Remember, if these selection criteria seem daunting, there's always a shortcut. Trust a seasoned team like ours to do the legwork for you. Market selection secrets. Now that you've brought in your scope for eligible markets, let's talk about how to identify which markets are best for swinging singles. We definitely don't recommend only Googling, quote, best markets to invest in in year 20, blah, blah, fill in the blank.
Kevin Clayson (11:14.474)
It's not the worst place to start, all the links that pop up are going to be lists from organizations that have an agenda. One that might not necessarily be in your best interest. You need to contextualize the information presented to you to decide if it makes sense for your goals. Our agenda is to share our strategy with you. We do this research for DfY anyway, and there's no reason not to make our method public for anyone else who wants to use it too. First, you need to know how to research markets because like economies, they ebb and flow over time.
A market that may have had great investment prospects five years ago may not be the best choice for your next investment property today. That doesn't mean the real estate you bought five years ago wasn't a good choice. If it performed as expected, it was a great investment. But this type of research is about choosing where to place capital today so that you can continue to pick properties that are going to perform well for you tomorrow. We've got a list of more than 30 criteria for comparing and analyzing different single family residential markets.
We know that's a lot, but trust us. It's the key to the moneyball strategy working the way it's supposed to. Swinging for singles is all about making sure that your investments produce for you both in the short and long term. If you don't do any research and buy a property that looks like a good deal on paper because the numbers appear good, there are multiple other factors that could mean that house wasn't a purchase worthy property after all.
By looking into this list of criteria, you're ensuring there isn't some hidden variable that may suppress the value increase of that property over time. We've carefully selected the criteria to ensure that you can maximize return on your investment over time and to make sure you can continue to stack micro wins with real estate singles. With that out of the way, let's dig into the market selection and scouting secrets. We've organized the investment score criteria into four main categories that we're going to cover. Number one, economics. Number two, demographics.
Number three, geography and number four, investor friendly economics. The allure of a strong economy is universal. A state exhibiting robust job growth is likely to witness an increase in population of wage growth, attracting superior renters and ultimately leading to your property's appreciation over time. But how does one evaluate an area's economy? Number one, economic function ranking. Cities are rated using the Ronnelly city rating system, which considers various factors such as retail sales,
Kevin Clayson (13:36.615)
newspaper circulation, presence of universities and hospitals, and corporate headquarters. Number two, three-year wage growth. Rent increases are unsustainable without concurrent wage growth. The absence of wage growth can lead to more delinquencies and evictions as people struggle to keep up with inflation. Number three, unemployment. Elevated unemployment suggests stagnation in job or business growth, resulting in a higher reliance on Section 8 and fewer middle-class tenants. A lower unemployment rate typically signifies a stronger economy.
Number four, job growth. An increase in job opportunities can indicate business expansion, leading to a more robust economy and demonstrating overall economic growth. Number five, median home price. Thus far, we've considered homes that meet the aforementioned economic criteria at a relatively lower price point. It's best to avoid large, populous coastal cities where median home prices and the cost of living tend to be higher than the national median. Number six, historic home price appreciation.
To make future projections, we assess home prices over the previous three years. We utilize data from a third party collection agency and gather our own data from on the ground sources residing and working within the same zip codes. Number seven, three year estimated price appreciation. Utilizing the historic home price appreciation, we project the next three years. This measure based on aggregated data collected on site focuses on future trends. Number eight, new construction.
Opting for a new home negates the need for major repairs, reducing the risk of unanticipated expenses thanks to the superior overall condition of the property. Furthermore, the equity growth associated with new neighborhoods is a factor to consider. Newly developed homes and neighborhoods tend to appreciate more, demanding higher rent. Our clients have had significant success investing in new homes. Given the intense competition, we collaborate directly with builders to negotiate properties. On to demographics.
Investment properties ideally sit in the bell curves sweet spot, possessing the highest number of renters and buyers in an in-demand area. Thus demographics are crucial. They help us pinpoint who we want to attract to our properties. When we mentioned the necessity of houses being in the right neighborhoods, we refer to affordably priced houses in low crime areas with good infrastructure. For example, street lighting, distance from busy roads, et cetera. And we want them situated in good school districts.
Kevin Clayson (15:55.967)
While you can discover some demographic information via a simple Google search, other aspects may require additional firsthand knowledge. If you're conducting the research yourself and struggle to find comprehensive information, reach out to a local property manager or real estate agent for guidance. They're likely to provide much of what you need. Here's our demographics criteria. Number one, niche best places to live ranking. Good neighborhoods are always sought after translating a higher demand for properties within these areas.
This increased demand corresponds to higher resale values and increased rental prices. Niche.com ranks cities based on factors like crime rates, quality of schools, cost of living and amenities. Number two, median wage. This metric indicates the average income of individuals in the area. Different median wage earners have varying preferences for property types. And this metric demonstrates what they can afford and what they cannot afford in terms of rent or purchase. Number three, education levels.
The education level of the residents in the area provides insight into potential buyers or tenants. Are the residents predominantly college educated? Are they multilingual? Well traveled. These qualities help determine if we can attract the type of buyers or tenants we desire for a more conservative hands off style of ownership. Number four, current population growth. This is an essential metric because population growth correlates to increased property value. A city experiencing population growth will typically witness an increase in real estate prices with population decreases.
often resulting in the opposite. Number five, historical population growth. Past data is useful to corroborate present day analysis. If the population has been growing consistently and is projected to continue doing so, we can confidently assume this trend will persist and plan our property strategy accordingly. Number six, average age of homes. The average age of homes in an area correlates with population growth.
A lower average age of homes in a city indicates a recent construction boom and a consequent influx of people. Additionally, newer houses are often preferred due to their modern layouts, increased number of outlets and double pane windows, all desirable features for long-term renters or buyers. Number seven, average age of population. A younger population typically indicates a larger pool of potential renters. Those transitioning into college, starting in the workforce or beginning family life are more likely to rent
Kevin Clayson (18:13.013)
than those already well established. Onto the next criteria, geography. Wait a minute, Kevin and Steve, didn't you mention earlier that geography doesn't matter? Okay, that's right, we did. However, we also noted that the mantra of location, location, location is significant provided that it's contextualized within the correct property evaluation strategy. So, while geography does matter, it doesn't hold the conventional importance it once did.
For our investment strategy, focusing on median price single family residences, we need the location that best suits this form of real estate investing. It doesn't necessarily have to be a prime location with bustling foot traffic or conveniences. Here's some factors we like to consider. Number one, cost of entry level home by state. Some states are more challenging for rental properties due to varying tax rates and down payment requirements.
We take into account all associated costs to establish potential rental prices and overall return on investment ROI. For instance, homes in Florida and California might both cost $300,000, but if property taxes and down payment requirements are lower in Florida, the ROI will be higher there. We aim to find the sweet spot between a low barrier of entry and a high ROI for maximum investment efficacy. Number two, typical weather conditions. Weather conditions can significantly impact a property.
For example, if rental property is in an area with frequent rainfall or snowfall, excessive vegetation growth could affect the property's condition. Elements like moisture, bugs, or rampant vegetation can deteriorate a property and increase maintenance costs over time. Number three, extreme weather. Apart from affecting residents' desire to live in an area, extreme weather conditions can also impact insurance rates. A property in a fire or flood prone zone will generally be more expensive to insure than one in a calmer climate.
Such properties can also pose more challenges in terms of financing. Number four, transportation. Considering the transportation options available for residents in the area is crucial. We evaluate local infrastructure, including airports, freeway systems, and mass transit. Is there an easily accessible major airport? Is the airport new or being updated to accommodate population growth? Freeway systems can indicate how recently roads have been funded while robust mass transit systems suggest cities with larger commuter populations.
Kevin Clayson (20:34.812)
Most single-family residences we consider are located in the suburbs, so it's essential to ensure easy commute to the city for potential tenants. Examining transportation and infrastructure provides insights into the city's future development. Last criteria, investor friendliness. Years ago, before the pandemic, we visited a friend who owned a real estate investor association in New York City. At the time, she shared with us a newly implemented law that forbade landlords from evicting non-paying tenants unless they secured alternative accommodation.
We were astounded such laws clearly don't favor investors, particularly average investors seeking to build wealth over time. So we tend to steer clear of markets and states with similar policies. Number one, property tax rates. These rates can differ greatly, even between neighboring properties divided by a county line. We refrain from generalizing and ensure we are familiar with the precise property tax rates for all of our properties. We also take note of property rate extensions like the homestead exemption if it's applicable.
which is crucial for accurate cashflow forecasting. Number two, income tax. Some states have no income tax, meaning property owners aren't taxed on income generated from those properties. Others do impose an income tax, which doesn't necessarily disqualify them as a favorable market. It's just another factor to consider for cashflow and tax liability. Number three, laws, regulations, and eviction requirements. We pay close attention to the rights of both landlords and tenants in potential markets.
How are all parties incentivized to act in good faith? What are the eviction costs and requirements? Are the processes straightforward or complex? These considerations are vital for assessing the investor friendliness of a market. Number four, rental vacancy rates. Average vacancy rates influence the rental rate in an area, potentially affecting the income you generate. This can also indicate the demand in that market, which is crucial for renting out the property quickly to avoid unnecessary mortgage payments.
Number five, price to rent ratio. It's important to track whether rents have kept pace with property price increases in a market. This impacts the cash flow we can expect from a property. Number six, three-year estimated rent increase. Rent increases can be affected by more than just inflation. We use local data to estimate future rent increases, taking into account their potential effect on cash flow against a fixed loan. Number seven, rent rates. It's essential that the rent rates in a market are higher than the mortgage payment.
Kevin Clayson (22:59.643)
Otherwise, the property won't generate positive cash flow. If the monthly payment, including price, interest rates, property taxes, and HOA fees is not covered by the potential rent, it's likely not a good investment market. Number eight, property insurance costs. Even in areas without extreme weather, insurance costs must be considered. Some areas require specific maintenance standards to ensure properties, which can affect the overall financials. Some areas require specific maintenance standards to ensure properties.
which can affect the overall financials. Number nine, homeowners associations or HOAs. HOAs can be a mixed blessing. They enforce property upkeep and compliance beneficial for out of state investors, but they can also overcharge or add unwanted services. Number 10, domestic and foreign entity registration of LLC requirement. Some states require you to establish an LLC, which we usually suggest in that state, meaning you need to file taxes and follow regulations in that state.
Others permit out-of-state LLCs, but with specific requirements. Awareness of these requirements can help you plan for costs, avoid penalties, and ensure timely filing. Number 11, owner or end-use occupied neighborhood. Some neighborhoods resemble detached department units lined up horizontally. Ownership usually incentivizes property upkeep. A neighborhood primarily occupied by renters might not be maintained as well as one with a mix of owners and renters.
In total, you need to consider about 30 factors across economics, demographics, geography, and investor friendliness when evaluating potential markets. This might sound overwhelming, but remember there are resources available to make this process easier. Don't let the long checklist deter you from embarking on your journey in the moneyball real estate investing world. Investing and fulfillment. This book has emphasized how the micro wins mindset is fundamentally about fulfillment.
Its purpose is to enhance your chances and degree of success in your journey toward your dreams, allowing you to find satisfaction in the steps you take along the way. The realm of real estate investing is no exception. We've touched upon how real estate investing, if not approached thoughtfully, can easily consume your life, essentially becoming a full-time job. While this suits some individuals who are passionate about the field, it can be anything but fulfilling for those who aren't as fervent.
Kevin Clayson (25:16.947)
The creation of a secure retirement plan is a fantastic accomplishment, yet it's not enough to compensate for the time and energy you might expend if you prefer to be a passive investor, yet find yourself actively involved. We believe this aspect isn't discussed sufficiently in the industry or in life in general. The Micro-Winds mindset is applicable to all areas of life, not just real estate or finance. Much like college students who are uncertain about their course of study,
Many of us constrain ourselves by mindlessly following the societal blueprint without considering what truly benefits us. Our aim in sharing the micro win strategy is to encourage everyone who encounters this message to question what they desire and how they can find fulfillment on their journey toward it. Dismiss the scoreboard and others opinions about what you should be pursuing. We define success as the ability to be content with what you're achieving every single day, regardless of the size of your accomplishments.
While it's common to look at the achievements of peers or individuals we see on social media and assume they've discovered a miraculous shortcut or simply got lucky, we're here to tell you that real progress, real magic, occurs when you take one small, possibly unobserved step at a time. This journey becomes indefinitely more enjoyable when you're passionate about the process. As we wrap up chapter seven, we hope that you now have a
clearer understanding of our investment philosophy and the various factors that we take into account when considering a potential real estate market. We've delved into the importance of economic conditions, demographics, geographical considerations, and investor friendliness. But our journey into the world of real estate investing is far from over. As we transition into Chapter 8, we'll continue to pull back the curtain on our property analysis methods. We'll share with you how we scrutinize and interpret the actual numbers on a property.
turning raw data into valuable insights. Prepare yourself to dive deeper into the heart of a real estate investment strategy where every number tells a story and every calculation can be the difference between an excellent investment and a regrettable misstep. Chapter seven, ideas summary. There's power of perspective. How a sudden shift in viewpoint can change understanding like flipping a switch to light up a dark room or scene wonder in a child's eyes in the midst of crisis.
Kevin Clayson (27:38.962)
Geography doesn't dictate where you can invest. By leveraging expert teams in various markets, living and buying anywhere becomes a possibility. Evaluating where to buy is a science. By considering factors such as economics, demographics, geography, and investor friendliness, you can make informed and successful decisions. Chapter seven, micro-wins. Reflect on a personal perspective shift. Can you recall a time when a sudden change in perspective altered your understanding of a situation?
Acknowledging this shift is a micro-win in personal growth and can be applied to various areas of life, including investing. Access your geographical boundaries. Have you been limiting your real estate investments to your local area? Recognizing the possibility of investing anywhere with the right team is a micro-win in expanding your investment horizons.