For experienced Investor here

[Jacopo Iasiello]

For experienced Investors here, what do you wish you knew when you're a newbie?

[Eric Fernwood]

I learned the hard way that properties don’t pay rent—tenants do. My first property, a C-Class multi-family in Houston, seemed like a great investment, but it turned out to be a money pit. I underestimated tenant behavior, facing issues like property damage, lease violations, and evictions.

Once I realized the importance of focusing on the right tenant segment rather than properties, everything changed. I targeted renters who pay on time, stay long-term, and care for the property. I researched this segment to discover what types of properties they preferred and where they lived. Understanding my customer, I bought similar properties to what they were currently renting.

This strategy is similar to how national retail chains operate: identify your target customers and provide what they want. For example, McDonald's sells poi in Hawaii and wine in France, adapting to local preferences.

In my approach:

• I chose property types based on what my target segment was renting. I did not choose.
• I selected configurations similar to what they were renting—for example, 3-bed, 2-bath, yard space, etc.
• I focused on locations where they were currently living.
• I set rent prices within their budget.

Summary

I became successful at real estate investing once I understood that what matters is the tenant segment who occupies the property. Properties do not pay rent; people do.