Alanna Avalone – Private Lender

2025, Issue No. 23

✨ Quote of the Week

The best way to predict the future is to create it.

Peter Drucker

💌 Letter to Our Investors

Dear Invertsor,

Here we are! The start of Q4. It always sneaks up faster than we expect, doesn’t it? One minute we’re talking summer rates and mid-year strategies, and the next minute we’re looking at the final stretch of the year. For me, Q4 always feels like a reset button. It’s the season where everything we’ve been working toward either comes together or reminds us what we need to adjust.

The reality is, markets rarely move in straight lines. This year has been full of noise, Fed meetings, inflation numbers, election chatter. Some investors have leaned into the chaos, while others pressed pause. But the truth is, no matter how messy the headlines get, the fundamentals of building wealth stay the same: clarity, discipline, and time in the market.

I see Q4 as a chance to refocus. Forget the missteps or missed opportunities earlier this year. What matters now is how you position yourself for the finish line, and just as importantly, for the opening lap of 2026.

So, take a breath. Step back from the flashing headlines. And let’s look at the themes that really matter as we kick off this quarter.

📊 Insights & Updates

🔹 Macro View – Entering Q4

If you zoom out, the story of 2025 so far has been one of constant recalibration. Interest rate expectations went from optimistic early in the year to “higher for longer” by mid-summer. By now, most seasoned investors have accepted the new normal: rates aren’t racing back to zero, but neither are we staring down runaway inflation. We’re somewhere in the middle, and the middle can be a surprisingly steady place to operate from.

Election-year noise is another factor. Every four years, investors get bombarded with predictions of “what will happen if X or Y wins.” The truth? Markets usually digest the outcome faster than expected. What matters most isn’t the politics but the policy — and even then, most real estate investors are playing a longer game than any single administration.

Globally, capital is flowing differently too. Some foreign investors who pulled back in 2023–2024 are creeping back into U.S. real estate debt, drawn by yields they can’t find elsewhere. That liquidity shift is subtle but important: it means competition for quality deals is picking up again.

So where does that leave us heading into Q4? In short: less panic, more patience.

🔹 Lending Snapshot

Now let’s ground it in the lending world:

DSCR Loans These remain the backbone for long-term investors. After a rollercoaster 18 months, demand is stabilizing. Investors like the predictability, even at higher rates, DSCR loans allow rental portfolios to generate steady cash flow. The big move this quarter will be locking in stability before spreads potentially widen during election volatility. Bridge Lending Still one of the most flexible tools on the table. With housing supply lagging demand, bridge loans are letting investors reposition properties quickly. The catch? Lenders are cautious. Strong borrower profiles and clean exit strategies are what’s getting deals across the finish line. Fix & Flip / Ground-Up These are selective plays. The investors getting approvals aren’t necessarily the ones chasing the cheapest leverage. They’re the ones showing experience, project detail, and timelines that make sense in today’s environment. The appetite is there, but the bar is higher.

If I had to sum it up in one line: quality clears, sloppy stalls.

💡 Investor Corner: Top 3 Portfolio Moves for Q4

Now let’s talk practical. If you’re looking at your portfolio right now, here are three moves worth considering as we step into the final quarter:

1. Lock Core Holdings

If you own properties that are cash-flowing solidly, don’t overthink it. This might be the time to lock in your financing and protect your margins. Rates might not fall as fast as people hope, and waiting could add unnecessary risk. Sometimes the best offense is simply securing your defense.

Think of it like winterizing a house: you don’t wait until the first freeze to get your pipes in order. You prep ahead. Locking in DSCR financing on your core holdings now is your version of winterizing.

2. Strategic Refinance

Bridge loans have been a useful tool all year, but Q4 is often the sweet spot to refinance into longer-term structures. If you’ve added value, stabilized tenants, or improved cash flow, a transition into rental financing could set you up well for 2026.

The trick here isn’t to refinance everything blindly. It’s about being strategic. Look at the properties where you’ve created real equity or where the numbers make sense long-term. By refinancing now, you give yourself predictability heading into next year, while freeing up bandwidth (and often capital) for new opportunities.

3. Selective Offense

This is where discipline pays off. Not every distressed property is a bargain, but some absolutely are. The investors who will look smart two years from now are the ones who did their homework and moved on undervalued deals while others were frozen by uncertainty.

Selective offense doesn’t mean chasing every shiny object. It means knowing your criteria — location, exit plan, risk tolerance, and acting decisively when the right opportunity appears.

Bonus Tip: Year-End Check-Up

One of the simplest but most overlooked portfolio moves? A year-end check-up. Run through your holdings, tax implications, and upcoming maturities. Clear out dead weight. Position yourself for clean books and sharper focus going into January.

✅ Final Note

Here’s the truth about Q4: it’s both the end and the beginning. On one hand, we’re closing the books on 2025. On the other, we’re setting the tone for 2026. The two are linked, how you finish will directly shape how you start.

So don’t get caught staring only at the finish line. Think of this quarter as a launch pad.

As Peter Drucker said, “The best way to predict the future is to create it.” That’s our opportunity right now, to create momentum, to create clarity, to create the results we want to see.

Here’s to a strong start to Q4.

Alanna Avalone – Private Lender

This newsletter is my weekly take on lending, markets, and mindset, from someone who still loves helping people get deals done.

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