13 painful investing lessons from the last 5 years

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What this past cycle taught us about real estate investing (the hard way)

Over the last five years, real estate investors were handed a masterclass—whether they wanted it or not. If you were in the game from 2020 to 2024, you felt it all—FOMO, cheap money, skyrocketing prices, interest rate shocks, and a whole lot of noise on YouTube.

This week, I wanted to reflect on this time with Matt the Lumberjack Landlord and Dion Talk and evaluate the 13 hardest lessons we all learned over the last five years. 

Why is this important? Because inevitably, we will go through tough times again, so we have to make sure do not repeat the same mistakes.

1. Cowards lose

When the market turns and you freeze—when you do nothing—that’s when you lose. The investors who got scared, sat on their hands, and waited for the 'perfect deal' missed the chance to buy when the market handed out discounts. Fear is real, but letting it rule your decisions costs you more.

2. Investor confidence is higher than it's ever been

Many investors who started post-2010 haven’t experienced a true downturn. The government has shown people that it will step in during a global crisis, which has reassured investors in a major way. This belief has fundamentally reshaped behavior. People are investing with a kind of fearless momentum that didn’t exist in the pre-COVID world.

3. Shiny objects can hurt you

Chasing the latest investment trends without proper due diligence can be detrimental. Stay focused on proven strategies and conduct comprehensive evaluations before diving into new ventures. For example, short-term rentals were red hot until they weren’t. Cities cracked down, supply surged, and many new investors realized too late that they bought at the peak of a fad. Airbnb riches turned into Airbnb regrets.

4. The sooner you build your network, the better

Establishing a robust network early on and weathering challenges together strengthens relationships and investment outcomes. In this game, you need a reliable network of professionals and peers to get you through the best times and the worst times.

5. Inflation is your best friend

Owning real assets while inflation eats away your debt is a powerful combo. While some panicked, the disciplined investors locked in low rates and watched rents climb. Many times, inflation is not the enemy—and for landlords, it can be a gift.

6. Bigger is not always better

During the investor frenzy, some people wanted 100 units and syndications before they bought one rental. That’s backward. While starting big sounds impressive, it magnifies your mistakes. The best investors learn the fundamentals first. In other words, you need to get punched in the face a few times on a duplex before you scale.

7. If you do the work, take action

Most people get stuck in analysis. They learn forever but they never actually buy. Don’t be one of these people. Education matters. But education without action is just another form of procrastination. The ones who did the work—and made offers—are the ones who got better deals, even in a shifting market.

8. Look for windows of opportunity

No matter what type of economy we are in, or how high interest rates are, there’s always a window of opportunity. However, it’s small and most people will miss it. Those who acted in November 2022, or again in late 2023, got deals others didn’t. Markets move fast—if you're not watching and ready to move, you'll be late.

9. Ask yourself what is enough

You need to ask yourself, “If I had 40 units, would I want 100? And if I had 100, would I want 500?” In this game, once you start seeing some success it is very easy to keep moving the goalpost. But you need to remember why you started investing in the first place, and focus on the goals you set— not compare your portfolio or lifestyle to anyone else.

10. You are going to be alive in 5 years—invest like it

It’s not enough to have a strategy — you must also take calculated, tactical steps to bring it to life. That’s what separates talkers from doers.

11. Keep an eye on work-from-home levels in your region, it's a boon for pushed-out markets

While remote work has tapered off from the height of the Pandemic Housing Boom, it is still at a much higher level than it was pre-2020. The more time that passes, the more remote workers will gain long-term confidence in their flexibility. That means that some of the more pushed-out markets could see more housing demand in the years to come, which is worth keeping an eye on as an investor.

12. Fast money brings out the pretenders and the frauds

Booms are exciting, but they also attract the worst kind of actors—those chasing easy money with little experience, little discipline, and even less integrity. There’s no substitute for hard work and experience. Real investors survive cycles. Pretenders ride hype—and crash when it ends.

13. No one is coming to save you

There is no get-rich-quick. No bailout. Just your decisions. Getting wealthy involves three simple steps: Create disposable income, become elite at something, and do it for a decade.

ResiClub chart of the week:

Last week, ResiClub’s Lance Lambert dove into an interesting hypothetical that I wanted to highlight here:

“If U.S. home prices fell by 10%. How would U.S. homeowners, in general, fare?”

Well, according to ResiClub’s analysis of loan-to-value ratios (LTVs), U.S. homeowners have a buffer: a lot of home equity, The loan-to-value ratios (LTVs) tracked by BatchService suggest that if home prices were to fall in more markets, most mortgage borrowers from 2021 or earlier would still have a sizeable buffer.

“Of course, given that the Pandemic Housing Boom has been over for a few years now, vintages from summer 2022 to spring 2025 in many parts of the country have much smaller equity buffers than their peers from 2021 and earlier,” Lance wrote. “Not to mention, as a result of amortization, recent borrowers who borrowed in the higher interest rate environment are also paying less toward principal than their peers who secured mortgages with 2-handle or 3-handle rates.”

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