We were able to refinance with our go to bank at a decent rate in this environment which allowed us to pull out our initial investment and renovation cost.

This likely reflects reduced demand for T-Bills, heightened inflation expectations, and increased Treasury supply, all contributing to higher mortgage rates and a tougher environment for buyers.There’s likely more at play here, but I agree it’d be great to see mortgage rates head in the other direction sooner rather than later.

But I am open to ideas.I see this environment as quite challenging to find a deal that will cash flow reasonably well in my area due to HCOL and interest rates (even as somebody with some resources). 

In the current environment, it might make sense to rent for a year or two before you commit to a purchase.

Most agents, I can tell you from experience, will not spend too much time on you since your so fairly new and at your purchase price your not a big fish so they will tend to put you on the back burner since heir return is not going to be a game changer.

One mistake or big unexpected expense could ruin you if you only have one or two rentals that are not cash flowing.That said, especially in the current environment, if you are coming from a very strong financial position then there may be times where it may fit your goals to invest in a highly appreciating area with no or negative cash flow.

Peniche also has a university and a fishing industry to provide alternative economic drives if tourism does take a hit.C.Supply constraints– Peniche is a peninsular!

How is this a positive environment for real estate investment?

It was before my time, but my understanding is that triggering a DOSC was more common in the 80's during a similar rising interest rate environment like we find ourselves in now.  

@Andy Mirza I agree that there will be vast opportunities for distressed debt in the post-Covid environment, but we won't see those assets probably for another 9 months or more.