Base Hits

What it is

Base hits is pillar number two of my five core values. I call it the Moneyball rule.

You ever seen the movie Moneyball with Billy Beane? He takes over the Oakland Athletics and he hires Jonah Hill, who’s like a mathematician. The mathematician comes in and says, hey, if you really break this down, it’s all about people getting on base. They got rid of the home run hitters — Jeremy Giambi — and said, we just need guys who have a high percentage of the ability to get on first base, whether by a base hit, a bunt, or a walk, because mathematically the more people we get on base, the more runs we’ll score.

So it’s base hits and bunts over home runs. Home runs ultimately will lead to a strikeout.

Why it matters

When I was growing my real estate business, I kept doing bigger and bigger and bigger projects. I thought that’s what you do. You just take on bigger projects. You start with a cosmetic flip and then before I knew it, I was taking roofs off and building second stories and building accessory dwelling units in the back until I hit the end of the line.

Ran out of money. Actually, it was a situation where I thought the house would sell for a lot more than it did. Lost like 200 grand on a single deal.

Home runs feel like you’re doing more. They’re actually just a bigger strikeout waiting to happen. Base hits is how you stay in the game long enough to compound.

How it shows up

While I was building that monstrosity, I was watching this guy across the street named Glenn. He bought a house by himself, went in and did the work himself, brought some contractors in for a couple of things. Didn’t even change the carpet in some of the bedrooms — he just cleaned them. Put in shaker style cabinets, cheap stuff, while across the street I was doing European style cabinets that cost me a fortune. This was in Colorado.

So this dude’s growing weed in the back, wearing flipflops, doing DIY work himself. Some MIY, manage it yourself. He made over six figures on that single flip in like six months.

A year later, I took my lumps and lost 200 grand on my monstrosity of a build across the street. When I say monstrosity, it was actually pretty beautiful. Looked like a drug dealer’s house. It was great. But I lost money, so who cares, right?

Related

gorilla flipping, cosmetic renovation, miy method, range of comps, over renovating

That is the Moneyball rule. We take base hits over home runs.