The Strike Zone Strategy: How I Avoid Deal Overwhelm as a LP

In 2016, I was reviewing a flashy new deal from an up-and-coming sponsor — 28% IRR, high-growth market, strong team. I had a good feeling. But something didn’t sit right.

The deal assumed 6% annual rent growth. Exit cap was lower than purchase cap. And there was almost zero budget for capital reserves.

I walked away.

Six months later, that same deal hit turbulence — capital call, missed distributions, and unhappy LPs.

I’m not telling you this to sound smart in hindsight. I’m sharing it because I used to say “yes” to every deal that looked good on paper. I did not know how to Underwrite these assets by taking the P&Ls and rent rolls. I just blindly went with what people were saying off forms, which is probably the worst way to do this. That’s when I realized I needed a framework — a personal filter to evaluate deals with consistency and speed.

I call it my Investor Strike Zone.

What’s an Investor Strike Zone?

Think of it like a batter’s strike zone in baseball. It’s the sweet spot where the pitches are hittable — not too high, not too wide, not a wild curveball.

Side note: I like those that are middle of the plate at the bottom because I play golf too. And I scoop that ball.

As a passive investor, your strike zone is a predefined set of deal criteria that match your financial goals, risk tolerance, and personal preferences. 

This saves hours of underwriting and networking too, if you're into that type of stuff.

How I Define Mine

Here’s a simplified version of my current strike zone (after 100+ k1s investments):

• Asset Class: Workforce housing (C to B), light value-add.

• Markets: Landlord-friendly states with job growth (TX, FL, AZ, etc.).

• Debt Structure: I lean toward bridge debt for upside, but balance it with some agency deals for safety.

• Hold Period: 4–7 years. Enough time to realize gains, not so long that my capital’s locked forever.

• Returns: 2x equity multiple over 5 years, or 8–10% cash flow annually.

Notice how it’s not just about returns. It’s about structure, people, and timing.

Early in my journey, I invested in a few “off-brand” deals outside this zone. Some worked out. Others taught me expensive lessons — like sponsors who hadn’t gone full cycle, or projections based on best-case scenarios with no margin for error.

A Few Mistakes to Avoid

1. Confusing marketing with underwriting.
Pitch decks are designed to sell. If the deal hinges on a refinance in year 2, or assumes 5%+ rent growth in a cooling market, that’s not conservative.

2. Over-diversifying without direction.
I see investors spread $500K across 10 random deals without a plan. You’re better off placing that across 5 well-vetted projects that match your strategy. We call this worse-ification. 

3. Ignoring liquidity and capital calls.
Passive doesn’t mean set-it-and-forget-it. If a deal calls capital in a downturn, will you be ready — or panicked?

My Advice: Build It, Then Test It

You don’t need the perfect strike zone upfront. Just start with a few preferences:

• What kind of cash flow do you want?

• What markets make sense to you?

• Do you like newer builds or gritty value-add?

Then refine after each deal. Over time, this becomes second nature — your investing muscle memory.

This is something I also touch on in my book, The Wealth Elevator, where I break down the passive investing journey floor by floor.