What I Learned From 2025

 

Yesterday I was talking with an appraiser from Bartow County, and he was sharing some of his experiences from 2025. Today, I’d like to tell you about that conversation and then share some of the things I learned after reflecting on the past year.

This came up because we’re still working through our 2025 end-of-year review at the office. I know — we’re well into January. But December was extremely busy for us, and we’re just now able to slow down and really look at the data.

 

With last year fresh on my mind, I asked the appraiser what his experience had been like. He told me that quarters one and two were fairly normal. He said July is typically one of his busiest months of the year, which is why he likes to take a vacation in June so he’s rested and ready.

 

But when he returned to work, he noticed something unusual — the market was slow, and so was his business. He told me his work was basically dead from July through November, and then suddenly it picked back up.

 

As I listened, I realized we had experienced something very similar, though across different parts of our business.

 

In the first quarter, we sold a house, bought a house, and filled a rental. We did notice that the house we sold took longer to move than what we’d experienced in 2024, and it sold for less than we projected. But we chalked that up to a normal winter slowdown. And since we were able to buy another house at a good deal and rent it quickly, we didn’t think much had changed.

 

Boy, were we wrong. Q2 made that very clear.

 

During the second quarter, we put another house on the market. In 2024, spring usually meant multiple offers within a week. But this time, the house sat on the market for over three months, and we had to do multiple price reductions before it finally sold.

That definitely got my attention.

 

Another unexpected thing also happened in quarter two on something that had always felt stable for us. Our private lenders started backing out.

 

In one case, a lender walked away from a deal we had been working toward for more than a year. They did so with no warning and very little explanation. That was a tough pill to swallow, especially since we had made plans — and even changed strategies on multiple properties — in preparation for that deal. We had passed on sales proceeds we needed, assuming this financing would come through. To say it put us in a hard spot would be an understatement.

 

Another lender, who had been a long-term note holder with us for over a decade, called out of the blue. They wanted to be paid off on some notes and wanted to increase the interest rate on others. They explained they were earning higher returns on newer flip deals and felt it only made sense to raise their rates. And despite having 20 and 30-year notes in place, they still had the right to call the loans due.

 

All of this was happening while we were $100,000 into a rehab we had projected would cost only $50,000. At the same time, our houses were taking longer to sell — and when they did sell, it was for less than we anticipated. In fact, that particular house hasn’t closed yet. It’s under contract, but for $25,000 less than our original list price.

 

Adversity is a funny thing. When it shows up, you can let it push you around, you can fight it head-on, or you can sidestep and look for the lesson it’s trying to teach you. That last option is usually the one I try to choose.

 

I’ve seen plenty of people talk about how difficult 2025 was in real estate. We felt it too. But here’s what I learned:

 

Diversification is critical — especially in real estate — because markets can change fast.

 

By diversification, I mean using multiple strategies and holding different asset types so you can pivot when necessary. We flip houses, we own rental properties, we hold notes, and we invest in mobile homes. When our houses started taking longer to sell and it became clear that the buyer pool had dried up from July through November, we stopped pushing flips and shifted our focus.

Instead, we moved toward land-home deals. In the third quarter, we rehabbed two double-wide mobile homes. Both went under contract in just a few days and received multiple offers. Those sales allowed us to correct some of the issues caused by the private lenders pulling back and by rehab budgets running over.

 

The lesson was clear: because we had diversification in our portfolio, we were able to move away from what wasn’t working — houses — and toward something where demand still existed — mobile homes.

 

We still have work to do. We’re re-evaluating how we diversify our marketing, and we’re even exploring DSCR loans for the first time. I now see that relying entirely on private lenders can be risky.

 

But overall, the way I look at it is this: the more we mix things up, the better prepared we’ll be for whatever changes 2026 may bring. And that’s what I learned from 2025.

 

Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.