If 2025 taught the real estate market anything, it’s that “normal” is no longer a reliable benchmark. Working directly with borrowers throughout the year gave us a ground-level view of where deals stalled, where banks pulled back, and how experienced investors adapted to keep projects moving.
Across Oregon and the broader Pacific Northwest, a clear pattern emerged. Risk management mattered more than optimism, and execution mattered more than projections. When costs increased or timelines slipped, the deals that survived were the ones with sufficient contingency, liquidity, and runway.
In this post, we’ll break down what actually happened in 2025, where the pressure points showed up most often, and the key lessons real estate investors are carrying into 2026.
Biggest Real Estate Headaches of 2025
Mortgage rates remained stubbornly high
As we look back on 2025, it’s impossible to ignore the impact mortgage rates had on the real estate market. Much like 2024, affordability dominated headlines. While rates eased modestly early in the year, they remained well above levels that supported broad buyer demand. Monthly payments stayed elevated, sidelining many would-be buyers. Demand slowed, particularly among repeat buyers, and sustained pressure on pricing and transaction volume weighed on overall market activity.
Bank lending behavior in Oregon remained conservative
Higher rates also reshaped bank behavior. Throughout 2025, many community banks tightened underwriting standards, especially for construction and bridge loans. Commercial real estate lending grew more restrictive as well, particularly for office and mixed-use projects. Residential mortgage lending remained relatively steady out of necessity, but origination volumes stayed far below pre-rate-hike levels.
Buyer demand cooled across the state
Buyer activity softened across Oregon as affordability challenges persisted. The slowdown was most pronounced in the Portland metro area. Eugene, Bend, and Salem showed pockets of resilience, but overall transaction volume remained below prior-year norms. On the positive side, inventory increased in several counties, giving buyers more options. In contrast, many rural markets remained constrained by limited supply.
Labor shortages and elevated construction costs tested builders
Even well-structured projects demanded more from investors in 2025. Finding viable deals and sourcing materials was often possible. Securing reliable labor was not. Qualified electricians, plumbers, HVAC technicians, and framing crews remained in short supply. Labor shortages, rising wages, tariffs, and ongoing supply constraints kept construction costs elevated throughout the year. As a result, many budgets exceeded initial projections once work began, despite careful upfront planning.
What We Learned in 2025
Oregon’s real estate market remained sluggish and uneven throughout 2025. High borrowing costs, tight bank credit, softening buyer demand, and elevated construction expenses continued to suppress sales activity and weigh on developer confidence.
That said, 2025 was not without opportunity. Some investors navigated these conditions successfully, and their projects shared common characteristics. Below are the key lessons that emerged and will shape investor behavior heading into 2026.
Takeaway #1: Risk management, not optimism, wins
Experienced investors know success is less about perfect projections and more about preparation. In 2025, risk management consistently outperformed optimism. The strongest deals were stress-tested against worst-case scenarios rather than built on best-case assumptions. Realistic timelines accounted for permitting, construction delays, and longer resale periods. Hope was not a strategy. Contingency planning was.
Takeaway #2: Discipline is a winning strategy
Discipline separated professionals from speculators. Pricing discipline, conservative assumptions, and realistic expectations defined successful projects. Whether pursuing a fix-and-flip project or short-term construction financing, the strongest borrowers presented numbers grounded in current local market conditions. Projects that could withstand higher rates and slower buyer demand, supported by conservative underwriting, tight timeline management, and protected liquidity, were far more likely to succeed.
Takeaway #3: Contingency and runway matter
Projects that focused narrowly on purchase price while ignoring delays, cost overruns, and slower exits struggled most in 2025. Successful investors planned for setbacks. Comprehensive budgets accounted for holding costs, permits, origination fees, interest-only payments, and closing costs. At Cetan Funds, we consistently emphasize line-item budgets with meaningful contingency reserves. Those reserves often made the difference between a manageable delay and a distressed outcome.
Takeaway #4: Efficiency is everything
In 2025, inefficiency was expensive. Permitting delays, labor shortages, slower-than-expected construction, and poor coordination quickly eroded margins. The most successful investors built realistic project timelines aligned with contractor availability, property condition, and local market dynamics. Clear milestones for permitting, inspections, construction phases, and resale helped keep projects moving and costs under control.
Takeaway #5: Flexible exit strategies are essential
A defined exit strategy is foundational to any successful real estate project. In 2025, flexibility proved just as important as planning. Investors with multiple exit options, such as selling or refinancing depending on market conditions, materially reduced risk. Those without flexibility were more likely to run out of time and face extension fees, penalties, or foreclosure. A clear and adaptable exit plan not only protects the investor but also strengthens lender confidence and improves access to future capital.
Why the Cetan Funds Approach Still Works
2025 rewarded discipline, punished complacency, and clearly separated preparation from speculation. Despite meaningful headwinds, Cetan Funds continued to finance successful projects across Oregon, including Portland, Eugene, Salem, Astoria, Beaverton, Welches, Woodburn, Grande Ronde, Corvallis, Albany, Sweet Home, Roseburg, Coos Bay, Brookings, Grants Pass, Medford, Ashland, Klamath Falls, Bend, Sisters, Prineville, La Pine, and more.
At a time when many lenders paused, retrenched, or narrowed their focus, we stayed active by concentrating on projects that made sense and borrowers who understood risk and executed well. Some lenders responded to a slower year by chasing speculative projects and weak borrowers simply to keep origination volume up. We stuck to our principles and chose to work only on viable projects and with strong borrowers. That discipline allowed us to fund a range of great projects throughout the year, including:
- Fix and flip projects
- Ground-up construction
- Rental rehabs
- Small commercial construction
- Commercial rehabs, including a hotel remodel and a restaurant remodel
- Multifamily construction and rehabs
- Residential and commercial bridge loans on both improved property and bare land
Looking Ahead to 2026
The lessons of 2025 are unlikely to fade quickly. Opportunity in 2026 will continue to favor discipline, preparation, and investors who know how to manage uncertainty rather than avoid it.
We expect banks to remain cautious, particularly in commercial real estate and business-purpose lending. Slower processes and tighter underwriting are likely to persist, making private capital an increasingly important tool for investors who value speed, flexibility, and certainty of execution.
Softer buyer demand, combined with gradually improving inventory, may create more attractive entry points, especially for well-located value-add projects. However, ultra-cheap capital is unlikely to return anytime soon, even if rates ease modestly.
For investors who approach 2026 with realistic assumptions, adequate contingency, and a clear plan, the environment remains full of opportunity.
If you want a second set of eyes on a deal before committing to a project in 2026, contact us and let’s map out your next move.
Loan Inquiry
For more information on how Cetan Funds can finance your real estate project, please fill out our inquiry form below. We will respond in two business days.
Your Contact Information
Information collected will only be used to evaluate your loan.
Investor Inquiry
For more information about investing in Cetan Income Fund, please fill out our inquiry form below. We will respond in two business days.
Your Contact Information
Information collected will only be used to contact you.
Broker Inquiry
If you have a deal you need help funding or want to inquire about our Broker Referral Program, please contact us below.
Your Contact Information
Information collected will only be used to contact you.
General Inquiry
We’d love to hear from you. Please submit your inquiry below and we will respond in two business days.
Your Contact Information
Information collected will only be used to contact you.
BORROWER FAQs
What is a Private or Hard Money Loan?
Private and hard money loans come in many variations, but most are short-term loans provided by an investor or group of investors when conventional financing is unattainable or undesirable.
Most private lenders and hard money lenders, like Cetan Funds, finance projects like fix and flip rehabs, rental properties, commercial bridge loans, land development, and many other unusual or unconventional properties and projects. A private or hard money loan can help real estate investors, developers, builders, and small businesses grow their portfolios and businesses faster than they could on their own.
Here at Cetan Funds, we empower people to build wealth through real estate.
Why choose hard money vs. bank loans?
Hard money (or private) loans are built for speed and flexibility. Banks often require months of paperwork, strict borrower qualifications, and rigid underwriting standards. At Cetan Funds, we base our lending decisions primarily on the value and potential of the property, not just the borrower’s financial profile. This means we can finance properties and projects banks typically decline due to condition, complexity, or unusual circumstances.
Hard money loans are ideal for time-sensitive opportunities like fix-and-flip projects, new construction, or land development.
Where Does the Money You Lend Come From?
Cetan Funds offers two pooled private equity fund investments for Oregon residents who qualify and accredited investors. Our two funds, called Cetan Income Fund and Cetan Opportunity Fund, serve as the primary source of capital for the loans that Cetan Funds originates.
Rather than matching individual investors to individual loans, or borrowing capital from banks or Wall Street as many hard money lenders do, at Cetan Funds, we manage our own pool of funds. The investors own shares of their fund limited liability company and the principals of Cetan Funds manage the portfolio of loans owned by the fund. All loans are serviced by Cetan Funds. To learn more about the advantages of this structure, please contact us.
What Types of Loans Does Cetan Funds Finance?
We can lend on most commercial and residential property in Oregon and SW Washington if the loan is for business or investment purposes. We provide short-term financing for bare land, land development, new construction, rehabs, and residential and commercial bridge loans.
Do You Lend on Primary or Secondary Residences?
No. We can only lend for business or investment purposes and do not lend on owner-occupied residential properties. Check out our blog to learn more about what we do and what we don’t do.
Where Do You Lend?
We lend exclusively in Oregon and SW Washington because we know the market well and are committed to helping grow our local market. We lend primarily in Western, Southern and Central Oregon with an occasional loan in Southwestern Washington.
Do You Only Look at the Property/Collateral?
While we are primarily a “collateral-based lender,” we do not solely look at the property/collateral. In our experience, who you lend to is just as important as what you lend on.
We strive to build long-term relationships with our borrowers, and we cannot achieve that if we focus solely on their real estate. So, we also take into consideration character, capacity, capital, and other conditions.
Weighing these important factors, which are often overlooked by other private and hard money lenders, helps us accurately measure risks for both our borrowers and our investors while allowing us to offer better all-around results for our clients.
Do You Have Minimum or Maximum Loan Sizes?
How Long Are Your Loans?
We offer loans as short as 3 months and as long as 60 months; however, most of our loans are for 6 to 12 months. Plus, we build in automatic extensions to every loan to ensure borrowers have time to deal with unexpected events and circumstances.
What Are Your Application and Underwriting Requirements?
Cetan Funds loans are customized to fit each specific scenario. Therefore, application and underwriting requirements can often vary depending on the situation. Typically, we require the following:
For Applications:
- Cetan Funds Business Loan Application (online form, link provided by your loan officer)
- Personal financial statements for all loan guarantors (form provided)
- Property/project description
- Summary of construction or investment experience (if applicable)
For Underwriting:
- 2 years of tax returns for all loan guarantors
- 3-6 months of bank statements
- Project/property-specific documentation (such as purchase/sale agreements, lease agreements, business financials, etc.)
- Detailed rehab or construction plans and budgets (if applicable)
Please contact us for more information on the application and underwriting requirements for your specific scenario.
How Fast Can I Get a Loan Decision?
How fast is funding?
We pride ourselves on moving quickly. Loan decisions are typically made within 1–2 business days, and pre-approval can often be issued just as fast. Once approved, we can close and fund in as little as 3–5 business days, depending on the project and documentation. That speed lets you secure capital and act on opportunities without the delays common with traditional lenders.
Can I Get Pre-Approved?
How Fast Can You Fund and Close a Loan?
As quickly as 3-5 days.
What is Your Minimum Down Payment?
What Are Your Interest Rates?
Rates vary depending on the project. Typically, annual interest rates are 10-12%. Interest is only charged on the outstanding balance. Therefore, interest is not charged on construction or rehab funds until they are drawn. So, for most of our short-term construction and rehab loans, borrowers actually incur far less than 10-12% in interest expense. For more information, please contact us.
What Are Your Loan Fees?
Origination fees vary depending on the project. Typically, origination fees are 2-4% of the loan amount. We also charge a $995-$1,495 administrative fee at closing.
Can I Live in the Property While I Have This Loan?
Unfortunately, no. Our borrowers cannot live in the residential properties we finance for them.
The only exception is in very specific commercial loan scenarios. If you wish to get a loan on a property you would like to live in now, or in the future, please contact us so we can help you find a lender for that. We are happy to help.
Can I Pay Off My Loan Early?
Do You Fund Rehab and Construction Loans?
On Rehab or Construction Loans, Do You Charge Interest on the Full Loan Commitment?
No. Interest is only charged on the outstanding balance.
How Do Construction Draws Work With Your Loans?
Construction draws are typically disbursed for work completed, materials purchased, or subcontractor invoices ready to be paid. Borrowers work directly with their loan officer, their main point of contact from start to finish on the project, to submit draw requests up to twice per month.
We do not charge fees for construction draws. Draw requests include a breakdown of the items awaiting reimbursement or payment, evidence showing the completed work or materials on site, and copies of subcontractor invoices or receipts over $2,500-5,000. Draws are typically processed in 24-48 hours.
Do You Fund Loans on Bare Land?
Yes, we provide bare land loans. Each situation is different. Please contact us for details.
Do You Finance Mobile or Manufactured Homes?
What is “Cetan”?
Cetan comes from the Lakota language and means “hawk spirit.” We chose it to represent the values we bring to lending: vision to see opportunities, loyalty in building long-term relationships, and speed in delivering funding when it’s needed most.
Supporting local organizations like the Cascades Raptor Center also helps us honor that connection to hawks and our beautiful raptors in the Pacific Northwest while giving back to the community.