Recently, I was talking with another real estate investor about our rental portfolios. And like all real estate investors, we love to tell you about a deal we bought. As we were talking I made the statement that I have yet to hit a homerun on a deal. They have all been base hits that become homeruns over time.
In baseball, it is rare to see a homerun. According to this website in 2022, an average of 1.07 homeruns were hit by each team during the a game. While the team will typically average about 33 at bats during the game. That is 1 homerun for every 33 at bats on average. I think it is fair to say that homeruns are rare.
Buying income producing real estate is the same way as baseball. Base hits put you in position to score. It isn’t a guaranteed score. But your team can’t score unless you have runners on the bases, which means they were either walked or they hit a base hit.
In real estate investing the thing that helps a base hit turn into a homerun is time. With an average of 6% percent appreciation, it takes a home 12 years to double in value. That is with you not doing anything to the asset. Just time has passed. And if you actually fix the place up and make improvements. You can expedite the increase in many cases.
Like I said, I have yet to hit a homerun. And in the current market it is even more difficult. Prices really haven’t come down that much, interest rates are up, and rents in many cases are flat. However, if you buy nothing you will never be in a position to turn a base hit into a run.
I encourage to get in the game now. Time in an investment is your best friend. So get in the game now and start the clock.
To your success and your future.
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