In real estate investing, in particular, we doubt that you won’t have at least one strategy that fits your financial means. Thus, the killer question is how to invest 10k in real estate if that’s all you’ve got?!
We know it sounds crazy. We also know that 10k seems too little especially for real estate. But, we don’t think so. Fortunately for you, there are plenty of opportunities to invest 10k in real estate for the maximum returns. All it takes is some dedication and a little background knowledge in the field. Therefore, here is how to invest 10k or less in real estate:
Related: Real Estate Investing for Beginners: Investing with Little or No Money
How to invest 10k in real estate: Passive income investing
Passive income investing is an ideal choice for, not only when you have little time, but also when you have little financial resources. As for how to invest 10k in passive income streams, here is what we recommend:
Real Estate Investment Trusts:
Real Estate Investment Trusts are a very popular choice for investors with little financial resources. For a beginner real estate investor, moreover, it is the ideal strategy. With as little as 10k on hand, you can invest in companies that specialize in real estate properties. Whether they specialize in real estate development or major property investments, it won’t make a difference as long as you make sure the company is reliable.
Thus, the best part of this strategy is that it does not require any time commitment on your side. The moment you make the payment, the REITs company is in charge. All you have to do is provide the funds and sit back to receive your share of profit.
One thing to keep in mind though, investing in REITs is more like investing in stocks. In other words, you are investing in the stocks of a company that works with real estate properties. Therefore, it is an indirect way to invest 10k in real estate.
Real estate crowdfunding:
In order to understand how to invest 10k in real estate through crowdfunding, you must know what crowdfunding means first. In short terms, it refers to online platforms that connect investors and others wishing to invest in real estate projects without getting involved. At this point, what you do is basically provide as much as you wish whether it’s 10k, less, or more. Of course, it all depends on the choice of crowdfunding platforms you make. Some require as little as $500 which allows you to diversify your portfolio and eventually invest in various streams. Others require more depending on the type of real estate they work with.
A similar aspect is real estate syndication. A syndicator pools financial resources from a large number of investors. These go towards either developing major real estate properties or purchasing huge properties for the maximum return. A syndicator takes charge once all the money is ready and you will have no further control over what happens next. So, this makes it another reasonable choice for how to invest 10k in real estate for the maximum profit.
How to invest 10k in real estate: Active income investing
Wholesaling real estate is a very convenient strategy when you want to figure out how to invest 10k. Finding distressed properties for cheap and putting them under a contract to eventually assign the contract to a buyer requires the least financial means. Simply, you might end up investing a few hundred dollars on marketing the property. As far as for the 10k you have on hand, you won’t even need the whole sum. The reason for this is that wholesaling is not about buying an investment property. It is merely about putting a property under a contract and assigning it to someone who is willing to buy it. Therefore, you can use the 10k you’ve got to invest in multiple wholesaling deals. If you manage to do a good job on that, wholesaling a property could generate up to 10k+ depending on your decisions.
Related: Thinking of Buying an Investment Property in 2018? Don’t Wait Any Longer
Buying a rental property is another way for those wondering how to invest 10k. We all know that a mortgage is the number one method for financing investment properties. We also know that a mortgage lender would ask for a 20% down payment at the very least. However, in this case, you have two options:
First, when you shop for a mortgage, you can always find a lender who requires less than 20% in down payment. In reality, this is the best way for how to buy a house with little money. Thus, the greatest shortfall is that you would start with less equity which means it would take longer to build.
Second, you have the option of searching for foreclosed homes or short-sales. These are properties whose owners fell behind on mortgage payments. A foreclosed home is one that is sold by the lender after the owner fails to pay. On the other hand, a short-sale would be the owner trying to sell the property for a lower amount than it’s worth before the lender takes over and sells it as a foreclosure. For these, you can find ones that are selling for a price that would make 10k enough as a 20% down payment.
One thing to keep in mind if you want to be making money in real estate: make sure you analyze the return on investment for every investment property you check. Many real estate investors have failed with their investment properties due to neglecting the profitability measures. Therefore, you want to assure not only to pick the best real estate investment strategies but also the best real estate investments.
Related: Airbnb Real Estate Investing: 3 Steps to Success
We doubt there is a better answer to how to invest 10k in real estate other than a real estate partnership. Working with other people is always a good idea not only to split the risks and duties but also to split the financial commitments.
You can always manage to find someone in your surroundings who would love to partner with you. You could offer a 10k payment as a contribution to the capital. Or, you could find an investor who is willing to give you the money in exchange for your skills and experience. Either way, you will end up sticking to your 10k budget or even less.
To help you find a real estate partner, we suggest that you read the following blog: “Where and How Can You Find a Business Partner for Your Real Estate Investing Business?“
For further information on becoming a real estate investor, make sure you check out our blog!