Where to Invest in 2026

Short version: expect gradually easing mortgage rates, a pick-up in transactions, and select pockets of distress—a combo that rewards investors who are ready early and disciplined on buy boxes.

The 2026 backdrop (why this matters)

• Mortgage rates: Several forecasters see the 30-yr fixed drifting down toward the ~6% handle by late 2026, which should loosen activity versus 2024–2025 doldrums.

• Sales volume: National home sales are projected to rise vs. 2025, with total sales moving toward the mid-5M range in 2026 (still below boom levels but improving).

• Distress: Foreclosure filings trended higher in 2025 from 2024 lows—still not a wave, but enough to matter to deal-hunters going into 2026.

• Rents: Single-family rent growth cooled materially in 2024–2025 (≈1.5–2.4% YoY), keeping pro-formas honest; demand remains, but rent assumptions should be conservative.

Roger’s 2026 Playbook

1. Q1 Acquisition Window: Be Early & Opportunistic

   • If rates ease into spring, expect activity (and prices) to follow with a 2–3 month lag. Be fully underwritten and capital-ready in Q1 to buy before broad competition returns.

   • Targets: bank-owned and courthouse auctions in markets where filings ticked up in 2025. Scrutinize title, occupancy, and repair risk; line up fast money + inspection partners.

2. Value-Add SFR & Small Multifamily (Conservative Rents)

   • Focus on light-to-moderate rehabs that create real NOI (bed/bath optimization, mechanicals, curb appeal).

   • Underwrite sub-2% rent growth base cases; let any upside be gravy. Recent history supports restraint.

3. Buy-and-Hold in Supply-Constrained Submarkets

   • Favor submarkets with tight inventory and resilient wages where even 5.9–6.1% mortgage rates unlock sidelined demand. Keep DSCR ≥ 1.25 at today’s rates; don’t bet the deal on future refis.

4. Wholetail / Flip Selectively

   • Spreads improve if you acquire before the herd. But exit risk is real if rates stall—use strict MAO, contingency timelines, and days-on-market data to cap exposure.

5. Auction Discipline & REO Triage

   • Build a repeatable checklist (title, liens, redemption rights, occupancy status, repair tiers) and cap bids at investor ARV math, not retail optimism. 2025’s rising but “normal-ish” distress supports deal flow without assuming a crash.

6. Rental Product Mix: Aim for Durable Demand

   • In a low-growth rent world, emphasize livability upgrades over luxe; mid-price rentals have steadier absorption than the extremes.

Bottom line: Acquire in early 2026, stay rate-aware, and shop REO/auctions with discipline. As rates drift down, price pressure returns, so front-load your buys and keep underwriting conservative. Get ready - It’s going to be a fun year.

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