10 Simple Ways to Invest $10K in Real Estate in 2023
December 16, 2022
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You've been working hard and managed to save $10,000. You're ready to invest your earnings in real estate, but you're not sure how to get started.
Investing your money is one of the most important decisions you'll ever make, and it's not a decision to take lightly. Becoming a real estate investor can be a viable option if you're looking for a relatively safe and opportunities to build wealth and potentially some passive income.
There are many different ways to invest in real estate, and each has advantages and disadvantages. The key is to find the right strategy for you based on your goals, risks, and investment timeline.
In this article, we'll walk you through 10 different ways to invest in real estate with just $10,000.
10 Ways to Invest $10,000 in Real Estate
1. First-Position Mortgage Liens
Concreit is a platform that enables you to build wealth in real estate with the help of experts. The app gives you the opportunity to invest in hundreds of high-yield first-lien mortgages across the United States.
This cash flow strategy, which has been used by hedge funds and private equity funds for wealthy investors, is now available to everyone.
- Concreit can be a good option for investors seeking to diversify their portfolios and reduce their exposure to riskier investments.
- Concreit invests in hundreds of high-yield, income-focused first-lien mortgages across the United States, which helps minimize risk.
- Dividends with Concreit are paid weekly, and the average annualized return has been 5.5% over the last year. You can cash out at any time after an initial 60-day settlement period, with no minimum length of investment time required.
- The Concreit app offers a more liquid alternative to investing in mortgage notes directly and is managed by a team of experts who carefully select each investment for the portfolio.
On the flip side, investing in mortgages may not be a good fit for people seeking higher-risk investments, such as loans made to speculators who fix and flip homes.
Generally, returns from first-lien mortgages are more predictable, but they may be lower than investing in real estate equity when the housing market begins to recover. Real estate equity may be a better option for investors looking for higher potential returns.
However, while equities may seem more profitable, they are also higher risk. Real estate debt is much safer. It generally provides a dependable income and has the potential to offer weekly payouts. In addition, real estate debt can help mitigate the effects of inflation.
With Concreit, you can effortlessly invest in what aligns with your needs and interests as they change over time. Whether you have short-term or long-term financial goals, the platform makes it easy for you to get started. This short YouTube video explains how to create an auto-investment schedule directly from your smartphone app.
If you're looking to expand your investment portfolio beyond the stock market and into something that will give you access to regular income, first-position real estate debt may be an ideal option. You can invest with Concreit at any amount.
To begin investing with Concreit, visit the website here.
2. Tax Liens
When property owners fail to pay property taxes, the municipality puts a tax lien on the property. This tax lien allows the municipality to collect unpaid taxes, plus interest and penalties, from the property owner. Cities and municipalities periodically hold auctions for tax liens, with the winning bids going to investors willing to accept the lowest interest rate or pay the highest premium for the lien.
Tax liens can be an attractive investment opportunity because they may offer an interest rate between 10% and 12%. However, there are potential drawbacks to tax lien investing.
First, unlike mortgage liens, tax liens are fairly speculative investments and can be difficult to research and track effectively. There's also the possibility the property owner will redeem the tax lien, so you only receive the interest on your investment rather than foreclosing on the property.
Finally, an investor who does take the property back in lieu of unpaid taxes may have to make significant repairs or evict the previous owner or tenant occupying the property.
3. Invest as a Limited Partner
Trusting and working well with someone are the main factors when deciding whether or not to invest as a partner. In a partnership, if you can invest $10,000 into residential properties, your partner (or partners) may be willing to match that amount. Additionally, you and your partners can split the responsibilities of managing the property.
However, there are some disadvantages. First, limited partnerships can be risky investments since all the partners are exposed to the ups and downs of the property's performance. Second, fees and expenses can eat into your returns, so review all documents carefully before investing. Finally, there is always the risk the General Partner will mismanage the property, which could lead to financial losses for everyone.
4. Real Estate Wholesaling
Wholesaling real estate is an investing strategy in which you find a motivated owner willing to sell their property for less than the fair market value. You put the property under contract and then assign that contract to another investor rather than purchasing the property yourself.
Being a real estate wholesaler is a big commitment and requires two essential skills: great negotiation tactics and marketing abilities. Once you have these weapons in your arsenal—along with putting in the time—you can start building a powerful network of regular investors for your wholesale venture.
5. Turn Your Home into an Airbnb
If you're looking to invest $10,000 into an Airbnb rental property, there are a few things to consider. First, are you only renting a home? This will affect the amount of money you can make from your investment. Additionally, take the time to research the pros and cons of investing in Airbnb before making your final decision.
On the plus side, Airbnb is another way to earn extra income. You can potentially make thousands of dollars per month by renting out your home on the platform. It’s also a flexible way to make money. You can choose when and how often you want to rent your place.
The drawbacks to investing in Airbnb include possibly dealing with difficult guests and damage to your property. You will be responsible for paying any associated fees too, such as cleaning or listing fees.
6. Join a House-Flipping Club
Consider partnering with an experienced house flipper or joining a house-flipping club or course offered in your area. A house-flipping club is a group of investors who pool their money to buy, renovate, and sell properties.
These clubs typically have a structure to manage the process, including a designated leader and a team of experts handling different renovation aspects. The goal is to buy properties at a discount, renovate them quickly and cheaply, and then sell them for a profit.
On the plus side, you can pool your resources with other investors to buy more expensive properties and complete more complex renovations. You also have access to experts who can help you as challenges arise.
On the downside, you may not have as much control over the process, and house-flipping clubs are generally considered to be a more speculative form of real estate investing.
7. Invest in a REIT
A REIT, or real estate investment trust, is a company that owns, operates, or finances income-producing real estate. A REIT can be publicly traded on a stock exchange, or it can be private. The primary purpose of a REIT is to provide investors with exposure to the real estate market without having to purchase and manage property directly.
There are many different REIT types, but most can be classified as either equity REITs or mortgage REITs. Equity REITs invest in properties and then generate rental income from them. Mortgage REITs invest in mortgages and other loan products secured by real estate.
The pros of investing in a REIT include the potential for higher returns, the diversification benefits they offer, and that they can be relatively low-risker risk than traditional real estate investing. The cons of investing in a REIT include the potential for volatile share prices and that they may not be suitable for all investors. Some REITs are also illiquid and can be high-risk investments.
8. Real Estate Mutual Funds
A real estate mutual fund is a type of investment that pools money from many investors to purchase real estate assets. Real estate mutual funds differ from REITs in a few ways.
First, REITs are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends. Mutual funds are not subject to this requirement. As a result, REITs may have higher payout ratios than real estate mutual funds.
Second, REITs must invest at least 75% of their assets in real estate. Mutual funds can invest in a wider range of assets, including stocks and bonds.
Due to their narrow focus, these types of investments tend to be more volatile than investments that diversify across many sectors and companies. Your investment could go up or down in value depending on real estate values or economic conditions. Additionally, these investments typically tend to have higher fees, affecting your potential returns.
9. Fractional Real Estate Investing
Fractional real estate investing refers to investing in property without ownership. In other words, an investor would purchase a share of a property rather than the entire property. This strategy allows investors to diversify their portfolios with minimal capital and offers greater flexibility than traditional real estate investing.
One disadvantage to fractional real estate investing is the difficulty in finding a property suitable for fractional ownership. In addition, many fractional real estate platforms offer illiquid investments, making it harder to sell your shares if you need the cash. Finally, fees associated with fractional ownership can eat into your potential profits.
10. Real Estate Crowdfunding
Real estate crowdfunding is a process where people pool their money to invest in properties. The risks and rewards are shared among the investors, and a professional team usually manages the properties.
The pros of real estate crowdfunding include the ability to diversify your portfolio and the potential to earn higher returns. The cons include the possibility of losing all of your investment and the illiquidity of these investments.
What’s the Best Way to Invest $10K in Real Estate?
There are many different ways to invest in real estate, and each option has its advantages and disadvantages.
For some investors, the goal is to generate a high return on investment, even if it means taking on more risk. Others prioritize stability and income generation, even if it means accepting a lower return. The right choice for you depends on your individual goals and risk tolerance.
One option that may be particularly appealing for those who prioritize income generation is investing in first-position mortgage liens through Concreit.
First-position liens offer a higher degree of security than other types of real estate investments since they are paid off before any other debts in the event of a foreclosure. This makes them an attractive option for more risk-averse investors.
Furthermore, first-position mortgage liens typically generate a higher yield than other types of real estate investments, making them an ideal choice for those looking to maximize their income stream.
Visit Concreit to learn more about investing in first-position mortgage liens.
This information is educational, and is not an offer to sell or a solicitation of an offer to buy any security which can only be made through official documents such as a private placement memorandum or a prospectus. This information is not a recommendation to buy, hold, or sell an investment or financial product, or take any action. This information is neither individualized nor a research report, and must not serve as the basis for any investment decision. All investments involve risk, including the possible loss of capital. Past performance does not guarantee future results or returns. Neither Concreit nor any of its affiliates provides tax advice or investment recommendations and do not represent in any manner that the outcomes described herein or on the Site will result in any particular investment or tax consequence.Before making decisions with legal, tax, or accounting effects, you should consult appropriate professionals. Information is from sources deemed reliable on the date of publication, but Concreit does not guarantee its accuracy.