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Rising interest rates have made some investors pause, wondering if real estate is still worth it in 2025.
But the truth is, seasoned investors aren’t running — they’re just adapting.
And if you’re smart about your strategy, financing, and who you buy from, there are still solid opportunities out there.
Let’s break down how to invest in real estate with high interest rates — and how FSBO sellers on platforms like ListLean are helping investors keep more profit and find better deals.
What Do High Interest Rates Really Mean for Investors?
In early 2025, interest rates for 30-year fixed mortgages are hovering around 6.5% to 7.2%, depending on credit, property type, and loan structure.
This affects:
- Monthly payments (higher debt service)
- Cash flow (rental profit margins are tighter)
- Borrowing power (you may qualify for less)
- Property values (prices may adjust to rates)
But high rates don’t mean stop investing. They just mean adjust your playbook.
1. Get Creative with Financing
When traditional loans are expensive, look for deals where financing terms are flexible.
FSBO sellers are often more open to:
- Seller Financing: The seller carries the note, often with better terms
- Subject-To Financing: You take over their low-interest mortgage
- Lease Option / Rent-to-Own: Rent it now, buy later when rates are better
These deals are harder to pull off through agents but very possible when working directly with the seller.
2. House Hack or Multi-Unit Buy
House hacking still works — even at higher rates.
- Buy a duplex or triplex
- Live in one unit
- Rent the others
The rental income covers part (or all) of your mortgage, which keeps your cash flow healthy, even if the interest rate is higher than you’d like.
And yes, FHA and VA loans can still be used on multi-unit homes with just 3.5% down in many cases.
3. Prioritize FSBO Deals (Less Competition, More Flexibility)
In a high-rate market, you need room in the deal. That usually means buying below market — or with better terms.
And that’s exactly why many investors are turning to FSBO sellers.
They aren’t paying a listing agent, they’re often more motivated, and they’re usually easier to work with on creative offers.
Platforms like ListLean.com let homeowners list without an agent for a flat fee. These sellers:
- Often price more realistically
- Want quick, direct offers
- Are more open to closing on your terms
It’s one of the best places to look for opportunities without going through multiple agents or crowded investor lists.
4. Focus on Long-Term Cash Flow, Not Quick Flips
In 2021, you could flip almost anything and make money.
In 2025? You need to buy right and think long term.
Buy-and-hold properties with:
- Good rental potential
- Low maintenance needs
- Stable tenant demand
- Realistic rent-to-price ratios
...will outperform risky flips all day. Especially when you lock in a fixed mortgage and plan to refinance when rates drop.
5. Run the Numbers with Today’s Rates — Refinance Later
Don’t base your investment strategy on “if rates go down.”
Instead:
- Make sure the deal cash flows right now
- Plan for reserves in case rents dip
- Treat any future refi as a bonus, not a bailout
This mindset keeps your portfolio sustainable in any market cycle.
Bonus: FSBO = More Equity for You
Let’s talk dollars.
When you buy a home directly from a FSBO seller — especially one using a flat-fee service like ListLean — there’s no listing agent commission padded into the price.
You get more margin on the buy side, which means:
- Lower entry point
- Faster break-even
- More room for renovation budget
- Better overall ROI
In a tight margin world, these details matter a lot.
Final Thoughts
High interest rates don’t mean “stop investing.” They just mean “invest smarter.”
The best investors in 2025 are:
- Using creative financing
- Working directly with FSBO sellers
- Buying for cash flow, not just appreciation
- Staying disciplined on deal analysis
- Skipping big commissions and inflated prices
If you’re looking to find your next rental, flip, or BRRRR deal — ListLean is where many smart sellers are listing directly. No middlemen. No markups. Just real opportunities.
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