--- title: "Investing Through Rate Hikes and Recessions | Addicted to ROI" description: "Interest rates and recessions scare most investors out of the market. Here's why my strategy barely changes, plus the 3 ways to keep sourcing great deals in any cycle." lang: en json-ld: | [ { "@context": "https://schema.org", "@type": "Organization", "@id": "https://addictedtoroi.com/#organization", "name": "Addicted to ROI", "url": "https://addictedtoroi.com", "logo": { "@type": "ImageObject", "url": "https://addictedtoroi.com/images/logo.png" }, "description": "Live your best life funded by your investments. Real estate, taxes, travel, and business, by Jennifer Beadles.", "founder": { "@id": "https://addictedtoroi.com/#jennifer" }, "sameAs": [ "https://agentsinvest.com", "https://doorprofit.com", "https://repstime.com", "https://strhours.com", "https://kidspayroll.com", "https://rentstager.com" ] }, { "@context": "https://schema.org", "@type": "WebSite", "@id": "https://addictedtoroi.com/#website", "url": "https://addictedtoroi.com", "name": "Addicted to ROI", "publisher": { "@id": "https://addictedtoroi.com/#organization" }, "potentialAction": { "@type": "SearchAction", "target": { "@type": "EntryPoint", "urlTemplate": "https://addictedtoroi.com/blog/?q={search_term_string}" }, "query-input": "required name=search_term_string" } }, { "@context": "https://schema.org", "@type": "Person", "@id": "https://addictedtoroi.com/#jennifer", "name": "Jennifer Beadles", "url": "https://addictedtoroi.com/about/", "jobTitle": "Founder, Addicted to ROI", "description": "Real estate investor and founder of Addicted to ROI. Built an 8-figure rental portfolio across multiple states and teaches everyday investors how to build passive income.", "worksFor": { "@id": "https://addictedtoroi.com/#organization" }, "sameAs": [ "https://agentsinvest.com", "https://doorprofit.com", "https://repstime.com", "https://strhours.com", "https://kidspayroll.com", "https://rentstager.com" ] }, { "@context": "https://schema.org", "@type": "Article", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://addictedtoroi.com/blog/investing-through-rates-recessions-hot-markets/" }, "headline": "How to Invest Through Rising Rates, Recessions, and Red-Hot Markets", "description": "Interest rates and recessions scare most investors out of the market. Here's why my strategy barely changes, plus the 3 ways to keep sourcing great deals in any cycle.", "image": "https://images.unsplash.com/photo-1611974789855-9c2a0a7236a3?w=800&q=80", "datePublished": "2025-11-12", "dateModified": "2025-11-12", "author": { "@id": "https://addictedtoroi.com/#jennifer" }, "publisher": { "@id": "https://addictedtoroi.com/#organization" }, "speakable": { "@type": "SpeakableSpecification", "cssSelector": [ ".tldr-answer", "h1" ] } }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://addictedtoroi.com" }, { "@type": "ListItem", "position": 2, "name": "Blog", "item": "https://addictedtoroi.com/blog" }, { "@type": "ListItem", "position": 3, "name": "Investment Strategies", "item": "https://addictedtoroi.com/blog?category=investment-strategies" }, { "@type": "ListItem", "position": 4, "name": "How to Invest Through Rising Rates, Recessions, and Red-Hot Markets", "item": "https://addictedtoroi.com/blog/investing-through-rates-recessions-hot-markets/" } ] }, { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [ { "@type": "Question", "name": "How do you invest in real estate when interest rates are high?", "acceptedAnswer": { "@type": "Answer", "text": "Treat high rates as temporary and don't change your fundamental strategy. When rates are high I lean on HELOCs for short-term funding and buy with a plan to refinance into long-term debt once rates fall. I underwrite conservatively at the higher rate and a higher vacancy assumption, and I keep making offers on value-add deals in growth markets. High rates also thin out competition, since many buyers pause, which often means better terms for those who keep moving." } }, { "@type": "Question", "name": "Is a recession a good time to buy real estate?", "acceptedAnswer": { "@type": "Answer", "text": "It can be one of the best times, because you buy quality assets while others are fearful. A property I bought in 2008 for $200,000 is worth over $400,000 today. The caveats: in a downturn lending tightens and rents can be stagnant, so deals are harder to pencil and you need cash and relationships ready. Cut unnecessary expenses, keep a conservative loan-to-value, and invest for the long term, because cycles turn." } }, { "@type": "Question", "name": "Where do you find good real estate deals?", "acceptedAnswer": { "@type": "Answer", "text": "Three main channels, in roughly increasing effort: investor-friendly agents (free to you, but you must be ready to write offers with proof of funds), wholesaler lists (more deal flow, but more risk since they often require non-refundable earnest money and no financing or inspection contingencies), and sourcing your own through direct mail, texts, cold calls, or door-knocking (most time-consuming, good for building momentum). Great deals exist in every market if you look where others aren't." } }, { "@type": "Question", "name": "Should I change my investing strategy when rates rise?", "acceptedAnswer": { "@type": "Answer", "text": "Mostly no. Higher rates haven't changed my approach. The fundamentals (buy cash-flowing value-add in growth markets, underwrite conservatively, make consistent offers) work in every rate environment. What changes is tactics: which financing tool you use, how conservative your appraisal assumptions are, and the fact that less competition can mean better terms. Stay cautiously optimistic and keep moving while others sit out." } }, { "@type": "Question", "name": "Why do local bank relationships matter for investors?", "acceptedAnswer": { "@type": "Answer", "text": "Small, well-funded local banks are where you get portfolio loans, lines of credit, and fast service that big banks can't match, especially in a crisis. During the 2020 disruption, my application at a local community bank was approved in 26 hours while investors at large banks waited weeks. Build these relationships before you need them, because the moment you need fast capital or flexible terms is the worst time to start cold." } } ] } ] --- [![Addicted to ROI](/images/logo.png)](/) [Travel](/pillars/travel/)[Real Estate](/pillars/real-estate/)[Tax Savings](/pillars/tax-savings/)[Business](/pillars/business/)[Paths](/paths/)[Blog](/blog/)[Tools](/tools/)[Apps](/software/)[About](/about/) [Login](https://members.addictedtoroi.com/) Subscribe [Travel](/pillars/travel/)[Real Estate](/pillars/real-estate/)[Tax Savings](/pillars/tax-savings/)[Business](/pillars/business/)[Paths](/paths/)[Blog](/blog/)[Tools](/tools/)[Apps](/software/)[About](/about/)[Login](https://members.addictedtoroi.com/) Contents 1. [01 Interest rates are temporary ](#interest-rates-are-temporary) 2. [02 Recessions are an opportunity, not a disaster ](#recessions-are-an-opportunity-not-a-disaster) 3. [03 Great deals exist in every market ](#great-deals-exist-in-every-market) 4. [04 The 3 ways to source deals ](#the-3-ways-to-source-deals) 5. [05 Build local bank relationships before you need them ](#build-local-bank-relationships-before-you-need-them) 6. [06 The takeaway ](#the-takeaway) [Home](/)/ [Blog](/blog/)/ [Real Estate](/pillars/real-estate/) Investment Strategies # How to Invest Through Rising Rates, Recessions, and Red-Hot Markets Rates up, rates down, boom, bust. Investors freeze at every turn of the cycle. My strategy barely changes, because the fundamentals don't. Here's how to keep buying in any market. November 12, 2025 11 min read Contents 1. [01\. Interest rates are temporary](#interest-rates-are-temporary) 2. [02\. Recessions are an opportunity, not a disaster](#recessions-are-an-opportunity-not-a-disaster) 3. [03\. Great deals exist in every market](#great-deals-exist-in-every-market) 4. [04\. The 3 ways to source deals](#the-3-ways-to-source-deals) 5. [05\. Build local bank relationships before you need them](#build-local-bank-relationships-before-you-need-them) 6. [06\. The takeaway](#the-takeaway) tl;dr Interest rates are temporary; they go up, then down. When rates are high I lean on HELOCs and buy with the plan to refinance later; when they drop I lock in long-term debt. Recessions are opportunities, not disasters, because you buy quality assets while everyone else is fearful (a property I bought for $200k in 2008 is worth $400k+ today). Great deals exist in every market through three channels: investor agents, wholesalers, and sourcing your own. The constants: underwrite conservatively with higher vacancy, make 1-5 offers a week on value-add in growth markets, and build relationships with small local banks before you need them. Every turn of the market cycle, investors freeze. Rates go up, they freeze. A recession looms, they freeze. The market gets hot and competitive, they freeze. There's always a reason to wait. Here's what I've learned in 17 years across multiple cycles: my strategy barely changes, because the fundamentals don't. Let me show you how to keep buying through rising rates, recessions, and red-hot markets alike. ## Interest rates are temporary This is the mindset that matters most. Rates go up, then they come down. They always have. So I don't let them dictate my strategy, only my tactics. When rates are high, I lean on HELOCs and short-term funding, and I buy with a plan to refinance into long-term debt later. When rates drop, I lock in that long-term debt at the lower rate. The financing tool changes; the deal criteria don't. I cover both tools in [how to finance a rental portfolio with other people's money](/blog/how-to-finance-a-rental-portfolio-other-peoples-money/). When rates climb, a few predictable things happen, and each one is an opportunity: - **Luxury homes soften** and prices drop in some areas. - **First-time buyers become long-term renters** until affordability returns, which pushes rents up against already-low supply. - **Cap rates compress and commercial lenders pull back.** Appraisers get conservative and stop using aggressive proforma numbers, so expect to bring more money down and prepare for low appraisals. - **Newer investors who've never seen a downturn pause for 3-6 months.** That means less competition and better terms for those who keep moving. So when rates rise, I double down. I underwrite at the higher rate, assume a higher vacancy, use average (not optimistic) rent appreciation, and keep making one to five offers a week on value-add deals in high-growth markets. A tool like [DoorProfit](https://doorprofit.com) makes it fast to underwrite each one at conservative numbers and check the neighborhood before I write the offer. Honestly, I enjoy the lack of competition. ## Recessions are an opportunity, not a disaster This sounds backwards until you've lived through one. Once you've survived a recession or two, you learn to buy quality assets while everyone else is fearful. The proof is in my own portfolio: a property I bought in 2008, in the teeth of the worst downturn since the Depression, for $200,000 is worth over $400,000 today. Imagine what the properties you buy in the next downturn will be worth a few years out. That said, I won't sugarcoat it. The last recession was harder than people remember. Banks didn't want to lend, nobody wanted to lend, and while prices were low, rents were stagnant, so it was genuinely tough to make deals cash flow. A recession is an opportunity _and_ a test. How to position for it: cut unnecessary expenses, keep a conservative loan-to-value so you're never forced to sell, and invest for the long term. Cycles turn. The investors who get hurt are the ones who over-leveraged or panic-sold; the ones who win are the ones who had cash and nerve ready. This is the same long-term, asset-manager mindset I describe in [the BRRRR strategy](/blog/the-brrrr-strategy-recycle-your-cash/). ## Great deals exist in every market "There are no good deals right now" is something I hear in every market, hot or cold. It's never true. Deals exist; you just have to be creative, know where to look, and know the right people. Recent examples of mine, one from each channel: - **MLS:** a 7-unit listed at $799,000. I negotiated to $775,000 plus a $15,000 repair credit, with a plan to raise rents from $6,250 to $8,400 a month, which would push the value past $900,000. - **Wholesale:** a duplex with a $126,000 ask, negotiated to $118,000, about $30,000 in renovations, renting at $700-750 a unit, with a projected $175,000 after-repair value. - **Off-market short-term rental:** a $400,000 property running $200-300 a night. The lesson: if you look the same way everyone else looks, you'll fight everyone else for the same scraps. I'd rather find deals where others aren't looking. ## The 3 ways to source deals You're only as effective as your deal flow, and there are three ways to get it, in roughly increasing effort: 1. **Investor-friendly agents.** Free to you, because they already have systems for finding deals. The only "cost" is being ready to write an offer the moment they bring you one in your criteria, so have proof of funds or a pre-approval in hand. 2. **Wholesaler lists.** A wholesaler finds sellers willing to sell below market. More deal flow, but more risk: deals often come with non-refundable earnest money and no financing or inspection contingencies, so you need to know the market cold. I break down how to evaluate one safely in [wholesale and assignment deals explained](/blog/wholesale-and-assignment-deals-explained/). 3. **Source your own.** Start a "farm" targeting specific owners by area and property type, using direct mail, texts, cold calls, or door-knocking. It's the most costly and time-consuming, but it's great for building momentum. There's no single right answer. It comes down to your risk tolerance, how easily you want deals to arrive, and your experience level. The market and deal-screening side of this is in [the out-of-state investing guide](/blog/out-of-state-real-estate-investing-complete-guide/). ## Build local bank relationships before you need them One more lesson, learned the hard way during the 2020 disruption. When everything seized up, the investors with local banking relationships got served, and the ones relying on big banks waited and waited. My application at a local community bank was approved in 26 hours; investors at large banks were still waiting weeks later. I'd been telling investors for years to build relationships with small, well-funded local banks, because that's where portfolio loans, lines of credit, and fast, flexible service come from. The moment you actually need fast capital is the worst possible time to start cold. So open the account and build the relationship now, while you don't need it. ## The takeaway Strip away the headlines and the fundamentals never move: buy cash-flowing value-add in growth markets, underwrite conservatively, make consistent offers, keep your leverage sane, and have relationships ready. Rates and recessions change your tactics, not your strategy. So the next time the market gives everyone a reason to freeze, ask whether it's actually changed what makes a good deal, or just thinned out your competition. Usually it's the second one. Stay cautiously optimistic, keep making offers, and let everyone else sit on the sidelines waiting for a perfect moment that never comes. * * * _This article is educational and reflects my own experience. It isn't financial advice, and every market and cycle carries real risk. Do your own conservative underwriting and consult the right professionals before acting._ Addicted to ROI is education and community, not financial or tax advice. Talk to a qualified professional before making investment or tax decisions. ![Jennifer Beadles](/images/founders.jpg) Jennifer Beadles Real estate entrepreneur with 17 years of hands-on investing experience. Built an 8-figure rental portfolio across multiple states and has helped thousands of investors build passive income through the Addicted to ROI community. The tool that goes with this ## The software that does this for you [ Deal analysis DoorProfit Type in a price and watch cash flow, cash-on-cash, cap rate and NOI move in real time, then save, compare and share underwriting across your whole pipeline. Analyze a deal ↗ ](https://doorprofit.com)[ Agent match Agents Invest Tell us the market and the strategy, and we match you with a vetted, investor-friendly agent who knows how to run a rental analysis, not just sell you a house. Match me with an agent ↗ ](https://agentsinvest.com) Before you close the tab ## Get the next one in your inbox. One email per new article, the day it goes up. No wall, no spam, unsubscribe in a click. [Subscribe, free →](/newsletter/)[Run a deal in the calculator](/tools/deal-analysis-calculator/) Read next [ ![How to Renovate a Rental You've Never Seen in Person](https://images.unsplash.com/photo-1581578731548-c64695cc6952?w=800&q=80) Investment Strategies ### How to Renovate a Rental You've Never Seen in Person 10 min read → ](/blog/renovate-out-of-state/)[ ![How to Determine Fair Market Rent in a Market You Don't Live In](https://images.unsplash.com/photo-1554469384-e58fac16e23a?w=800&q=80) Deal Analysis ### How to Determine Fair Market Rent in a Market You Don't Live In 8 min read → ](/blog/fair-market-rent/)[ ![The Questions to Ask Before You Buy in a Market You Don't Live In](https://images.unsplash.com/photo-1423666639041-f56000c27a9a?w=800&q=80) Due Diligence ### The Questions to Ask Before You Buy in a Market You Don't Live In 9 min read → ](/blog/market-call-questions/) If you like this ## Read these next Hand-picked to go deeper on real estate. [![How to Renovate a Rental You've Never Seen in Person](https://images.unsplash.com/photo-1581578731548-c64695cc6952?w=800&q=80) Real Estate ### How to Renovate a Rental You've Never Seen in Person 10 min read](/blog/renovate-out-of-state/) [![How to Determine Fair Market Rent in a Market You Don't Live In](https://images.unsplash.com/photo-1554469384-e58fac16e23a?w=800&q=80) Real Estate ### How to Determine Fair Market Rent in a Market You Don't Live In 8 min read](/blog/fair-market-rent/) [![The Questions to Ask Before You Buy in a Market You Don't Live In](https://images.unsplash.com/photo-1423666639041-f56000c27a9a?w=800&q=80) Real Estate ### The Questions to Ask Before You Buy in a Market You Don't Live In 9 min read](/blog/market-call-questions/) [![How to Invest Out of State Without Getting Burned (The One Trap)](https://images.unsplash.com/photo-1500382017468-9049fed747ef?w=800&q=80) Real Estate ### How to Invest Out of State Without Getting Burned (The One Trap) 8 min read ](/blog/invest-out-of-state/) Off to go build something. 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