Key Takeaways

• You can invest in real estate with as little as $10 through REITs and online platforms like Fundrise
• REITs are publicly traded companies that invest solely in real estate and can be bought and sold just like stocks
• Investing directly into real estate is more costly and time consuming, but can also be the most rewarding
• House hacking is a strategy in which an investor lives in a property and rents portions of it out to help cover their mortgage

In this post, I am going to walk through 5 ways to invest in real estate without having to save hundreds of thousands of dollars first.

Investing in real estate is a fundamental tool for building wealth. And while there are many options like stocks and entrepreneurship, in my experience investing in real estate is one of the most straightforward and consistent methods of building long-term wealth.

If you’re unsure about real estate investing, let me ask you this: if you owned a single piece of property today, free and clear, would your life be better off? The answer is yes. And while I can’t hand you a fully paid off property today, I can give you 5 ways to get started today so that in the future you can reap the benefits of investing in and owning rental properties.

Let’s dive in:

1. Buy REITS (Real Estate Investment Trusts)

REITs are publicly traded companies that invest solely in commercial real estate like office buildings, apartments, and hotels. Buying shares in a REIT allows you to benefit from the gains of real estate without having to physically buy a given asset.

Now you might be wondering if REITs are a good investment? The answer is yes, depending on which REIT you buy. My personal favorite is Gladstone Commercial Coporation, ticker $GOOD. The reason I like $GOOD is because they have a well diversified portfolio of industrial and office spaces. Their stock price has also gone up 11.4% this year, and 31.1% over the last year (as of May 2024). My favorite aspect is that they have an 8% dividend paid monthly and they have not missed a dividend payment since Gladstone’s inception in 2003. Yes, even during the real estate crash in 2008-2009, $GOOD continued to pay their monthly dividend.

In order to purchase a REIT like $GOOD, you’ll need to open up a brokerage account. The simplest way to do this is to download an app like Robinhood and complete their account creation process. From there, you’ll be prompted to deposit funds from your bank account which you’ll be able to use to purchase shares in a REIT. Here is my referral link to get started: (Join Robinhood).

2. Use an Online Investing Platform

Online investing platforms allow you to invest in private markets that otherwise wouldn’t be accessible to the average investor. Companies like Fundrise offer exposure to assets across real estate, private credit and venture capital with as little as $10 to get started.

It’s important to note that these platforms also have drawbacks. Once you commit capital to these funds, it can take a while to see returns. Additionally, many of these platforms fail to keep up good returns when compared to individual investors in the broader market.

3. Consider a Private Partnership

Many investors form their own funds to raise capital from other investors to acquire and manage a portfolio of deals. While these partnerships can be difficult to find and participate in, they can offer lucrative returns without the hassle of managing the investments directly.

For example, I am currently in the process of raising my first fund, Dean Fund I, with the goal of scaling my investments in rental properties and delivering a good return on investment to my investors. If you have $25,000 and are interested in passive rental income through a private partnership, reach out to me directly at [email protected] to learn more.

4. Invest in a Rental Property

The best decision I ever made was investing in my first rental property in 2021. I was scared, nervous, and excited all at the same time. But I decided to take the plunge by investing in a $75,000 rental property in Tulsa, Oklahoma, and I will never look back.

Rental properties have many benefits, including passive income, price appreciation, leverage, tax deductions, and diversification. They also have many headaches, including bad tenants, vacancies, maintenance, and even catastrophes like a fire or an earthquake. But in my experience, the benefits far exceed the headaches.

If you are interested in buying your first rental property but don’t know where to start, I completely understand. Which is why I created a free detailed guide outlining everything you need to know to buy your first rental property.

5. House Hacking

One of my biggest regrets as a real estate investor is that I didn’t start sooner with the “house hacking” strategy. House hacking is a strategy in which you purchase a property and live in one section while renting out the rest of the property. This can be a multi-unit apartment building, or simply a house with multiple bedrooms to rent out.

Because you live in the property, you can qualify for an FHA loan, meaning you can obtain a low-interest loan with a down payment as low as 3.5% of the property’s purchase price. This allows even college students to execute this strategy without having to save hundreds of thousands of dollars, and your tenants rental payments will cover some or even all of the monthly mortgage payments.

This strategy works best when you are young and have the energy and lifestyle to share your home with strangers paying you rental income. As you get older, you may find that your lifestyle simply doesn’t allow for this type of arrangement, and your window to house hack will be gone.

As with any investment, it’s important to choose an investing strategy that works for YOU. Just because investing in real estate was the best decision I ever made, that doesn’t automatically make it right for you. Depending on how much time and capital you have to invest, you may want to consider dipping your toe in the water through a REIT, online platform, or a private partnership before trying to buy a full property.