Kevin AmolschIt’s been an interesting few years, to say the least. The economy has been noisy and confusing, yet some investors continue to do deals and make money while others are falling behind.
When you step back and observe what successful investors are doing, and compare that to those who are struggling, you start to see clear patterns. Certain mistakes are costing investors big.
Because Pine works with such a wide variety of real estate investors, we have a unique vantage point. As we enter a new year, I want to share seven mistakes I’m seeing investors make so you can avoid them and position yourself for a successful 2026.
1. Expecting Rates to Come Down
I hear it all the time: “Rates are too high. Housing is unaffordable. Should I wait until rates come down?”
The truth is no one knows what 2026 will bring for interest rates. I see compelling arguments that they could move in either direction. But the most realistic outcome? They stay close to where they are now.
Many well-known economists agree.
If you’re flipping houses, rate direction matters mostly for your end buyer. But if you’re buying rentals, this topic is critical. Hope is not a strategy. Counting on rates to drop to make a deal pencil is risky at best. Make sure your numbers work today.
2. Ignoring Inflation Pressure
The Fed declared war on inflation in 2022 and fought it with rapid rate hikes, the most aggressive in history. The battle looked successful and inflation seems to be in control as we head into 2026, but the war may not be over.
We’ve already seen rate cuts, the end of quantitative tightening, and a return to quantitative easing (QE). QE injects money into the system to support employment and rates, but it’s also a proven driver of inflation. That effect takes time to show up, but it will.
Investors should expect higher costs in 2026. Insurance, maintenance, and materials could all climb. Yet I still see underwriting models that project rent increases, but flat expenses. That’s dangerous.
If you’re buying for the long term, assume expenses rise and rents stay flat. If the deal still works, buy it.
3. Assuming Liquidity Will Always Be There
I’ve never liked the saying, “Find the deal and the money will find you.” That’s just not true anymore.
Banks are tightening, regulations are increasing, and balance sheets are stressed. Line up your financing early and cultivate multiple lending relationships.
Liquidity issues also show up at maturity. Lenders, both banks and private, are getting less willing (and sometimes less able) to extend loans. Some are being forced to call notes, even pushing borrowers into bankruptcy.
At Pine, we have leverage and control our decisions, but even we’re becoming more cautious with extensions. Start your renewal conversations months before maturity and always have a Plan B.
4. Confusing Activity with Progress
At our most recent annual business planning retreat with our coach, one question stood out: “What can we say no to?”
That’s the mindset for 2026. Slow down and focus on doing fewer but better deals.
The market is slower, margins are tighter, and appreciation is no longer rescuing mediocre projects. Staying busy doesn’t equal being profitable. In fact, stretching thin across marginal deals can take you down fast.
Ask yourself: what can you say “no” to this year?
5. Getting Greedy
Greed hurts in any market, but it’s especially dangerous now. With higher rates and slower appreciation, time kills profits.
Price your properties aggressively and stay ahead of the market. If activity is slow, don’t hesitate to drop the price. And remember: the first offer is often the best one.
Don’t let emotion or pride cost you holding time and profit.
6. Over-Improving Properties
I am less concerned with this, but I still see it so I wanted to include it. It’s tempting to go big on a rehab, especially when you own multiple projects in one area and want to “set the comp.” But that strategy can backfire when transaction volume is low and holding costs are high.
Instead, aim for the median or slightly below it. Stick to solid, market-standard finishes that appeal to value-minded buyers. Buyers today want clean, functional, and priced right – not high-end extras.
7. Underestimating Risk in a Changing Market
This final point ties them all together. The investors who thrive in 2026 will be the ones who stay disciplined, conservative, and prepared.
Focus on liquidity. Expect inflation. Underwrite conservatively. Control what you can and plan for what you can’t.
What this means for you:
2026 will frustrate some investors and reward others. The difference comes down to discipline. Avoid these seven mistakes, and you’ll put yourself in the group that thrives.
