Grand slams and strike outs. What about the base hit?

[Ken D.]

I'm at a point I'm sure many other new investors in BP are at where significant time self educating has been spent, but are struggling with the lack of experience or network to make some of the strategies and guidelines recommended work in the near future.

Going back through podcasts and posts led me to @Brian Burke's blog post from several years ago about needing base hits before you can get the grand slam. Yet most conversations center around good deal vs bad deals, or around more experienced investor's guidelines. I get it; we want to model those who are successful, but what about the mediocre deal that get's your foot in the door? To my point, there have been some recent satirical threads that have capitalized on seemingly ridiculous posts (which I have thoroughly enjoyed as well). But when all you hear is "how to buy with no money down" or "I get $XX.XX dollars per door all day in my market" that's what you get. The 2018 second quarter RealtyRates Investor survey says that apartment cap rates are on average between 4.9-13.8 nationwide depending on LTV, but the survey is not limited to recent acquisitions and I assume that those that participate in the survey know what they are doing .

So this bring me back to my question: for those who are actually set up to responsibly invest but don't have the experience or network to hit the 15% CoC returns in today's market where the pros are also claiming good deal are hard to come by, is shooting for the 5 cap cash purchase on their first deal to learn the ropes a crazy idea? I haven't seen this advice given in the many posts asking about what type of returns new investors should realistically expect. Why not and what about that base hit?

And full disclosure, I'm in contract for a small commercial multifamily property that is probably considered a mediocre deal by many, but one that I have confidence (for what that's worth) won't lose money, with the intent of using it as a learning platform and equity tap for better performing acquisitions. Happy to share more details for those interested in my situation or want to charitably help me make some critical decisions in the next couple days.

Here is Brian's article I'm referring to: 

https://www.biggerpockets.com/renewsblog/2013/01/2...

[Brian Burke]

If you are a beginner in this business the biggest problem is that most wouldn't recognize a good deal if it came up and punched them in the nose.  Oh everybody will say they can, and some of them are right, but think of the statistic of how many boot camp graduates are not investing in real estate two years later.  

I was no exemption to this rule.  I read every real estate investing book imaginable when I was trying to start in this business and my first deals were anything but home runs.  Lost on the first one, made $1,500 on the second one, and got a bit better (luckier?) on those that followed.  Over time I was able to hit a lot of home runs and even a few grand slams.  But the vast majority were base hits, or even a few barely break-evens and my share of losers.  In over 700 deals I think that's to be expected.

Have you ever seen a photographer in action?  They take 1,000 pictures and only one or two make it in the magazine.  Now I'm not advocating that you go out willy-nilly buying every piece of real estate in the hopes that you'll have a winner in there but my point is that you have to do the best you can, do the deals that you think have a low probability of being a loser and gain experience that will give you the skills and the access to the home runs and grand slams.

If you read the books and follow the blogs and even some forum posts you might think that everybody hits home runs on their first try.  Yes, and golfers also get struck by lightening.  Things happen, and when they do people write about it.  But when nothing happens it's not interesting so that story never gets told.