The Silent Killer of Real Estate Deals Across America

Is it just me, or does it feel like the kids have been out of school forever? After surviving snowmageddon a couple weeks ago, they scored another four-day weekend! School systems these days are so soft! 😂🤣

Meanwhile, we’re here to break down another wild week in the mortgage world. Let’s gooo!

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Read time: ~5 minutes

Rates ended LOWER compared to last week, and volatility was HIGH. Rates remain in the low 6% range for most loan types without paying discount points. Paying discount points can get you in the high 5's.

The Silent Killer of Real Estate Deals Across America

Nick and I tend to live pretty quiet lives. That said, we do like to pull back the curtain from time to time for our newsletter family 🙂

What many people don’t realize is that we are active real estate investors. We’re constantly looking to acquire properties such as single-family rentals, fix-and-flips, Airbnb's, multifamily, and commercial properties. After years of being immersed in this industry, we’d rather invest our hard-earned dollars in real estate than leave much exposed to the stock market.

Last week, we looked at a multi-unit property about 30 minutes from home. We drove out with our families in tow, excited about what looked like a sweet opportunity. But within minutes of speaking with the owners, it became clear the deal was going to hit the skids.

One of the very first questions any serious buyer should ask when evaluating a multifamily or commercial property is simple:

“Can I see the last three years of financials?”

The sweet owners explained that they hadn’t reported all of the income generated by the property. In fact, they claimed the income shown on their tax returns was more than 70% lower than what the property actually produced. They reassured us they could provide “receipts” to show the real numbers 🫠🙄

Unfortunately, that’s where many deals die.

Most owners don’t realize that if income isn’t claimed on tax returns, it effectively doesn’t exist to a lender. Without verifiable income, traditional financing becomes nearly impossible. That leaves buyers with only two options: cash or hard money, both of which come with lower valuations. 

So there we were, standing in front of a very kind couple, having to explain that their “pie-in-the-sky” valuation simply wasn’t realistic. Not because the property was bad. It was actually an incredible property we genuinely wanted to buy. It was because the income wasn’t properly documented.

That property has now been sitting on the market for over 100 days. And unless something changes, it will likely continue to sit.

Rates End Lower After a Crazy Week!

Wow! This past week was a perfect reminder of just how fast things can change in the mortgage world.

By midweek, it looked like mortgage rates were headed for death as a new jobs report came in much stronger than expected. About 130,000 new jobs were added, nearly double what economists had forecasted! Unemployment dipped slightly and wages rose faster than anticipated.

In simplistic terms, the economy looked freaking strong, which is bad news for us hoping for lower mortgage rates. After all, if the economy is running hot, there’s little reason for the Fed to step in and cut rates.

As a result, rates moved higher on the news. I even shared a video explaining that we could be stuck in the low-6% range for a while, as hopes for a near-term Fed rate cut nearly disappeared.

Then came Friday 🙂

The latest inflation report showed that inflation continues to cool! Woohoo! Inflation came in below expectations at 2.4%, moving closer to the Fed’s long-term target of 2.0%. As a reminder, when inflation cools, mortgage rates often follow. That bit of good news was enough to calm the bond market, which mortgage rates closely track.

Despite the strong jobs report earlier in the week that should have pushed rates higher, mortgage rates actually ended the week better than where they started. Let's gooo!

Student Loans Becoming Major Roadblock

On average, Nick and I review about 100 credit reports every month, so we tend to spot financial trends before most people do. One concerning pattern we’re seeing more and more often is student loans falling behind.

Since student loan relief ended at the close of 2024, missed payments have started showing back up on credit reports. By the end of 2025, a record 16.4% of student loans were at least 30 days past due. That’s a big problem, especially for anyone hoping to buy a home.

With that being said, now would be the perfect time to reevaluate the steps your borrowers could take to tackle those student loans in default:

Rehabilitate the Loan
You can enter a loan rehabilitation program. This requires making nine on-time monthly payments to bring your loan out of default. Important to note: you cannot prepay to speed up the process either. So, rehabilitation could delay your home purchase by at least nine months! 😭

Consolidate the Loan
You may be eligible to consolidate your defaulted loan into a new Direct Consolidation Loan. This pays off the old defaulted loans and creates a new one, bringing your status back into good standing much faster than rehab.

Pay the Loan in Full
And of course, the simplest (but not always the easiest) option would be to just pay the full balance and clear the debt completely.

Instagram Reels of the Week

Two Ways We Can Help

1. Let’s collaborate – schedule a zoom meeting

2. Tough deal?  Let us help!

Don’t hesitate to reach out if you need anything at all. Have a wonderful week!