How to Invest $100k in Real Estate (2024)

What is the best way to invest $100k in real estate? Should you buy a small apartment building to fill with renters for passive income? Or should you play the stock markets, investing in real estate-related companies for stock price increases?

With so many types of investments available to real estate investors, choosing the right investment strategy for you can be tricky.

In this article, we’re going to show you how to invest $100k in real estate. You’ll get 10 solid investment options and the pros and cons of each. By the end of the article, you’ll be ready to start investing!

Here are the top 10 ways to invest $100k in real estate. Each investment strategy has its own strengths and drawbacks. And since your investment goals may be different from other investors, these are listed in no particular order.

The traditional buy-and-hold real estate model involves buying a second home as an investment property, completing some minor renovations, and finding long-term renters to lease the property for a year or more at a time.

In affordable housing markets, $100k would be enough to cover a 20% down payment plus closing costs and holding costs until your new renter moves in. In a really affordable market, you might even have enough cash on hand to cover the necessary renovation costs as well.

Buying an investment property to use as a short-term rental is similar to the classic buy-and-hold. But in this case, you’ll be looking to fill the property with guests who plan to stay for a period between one night and one month. Short-term rentals are often designed to appeal to people on vacation, but they can also be useful for traveling professionals like travel nurses, auditors, and business owners.

As with traditional buy-and-holds, if you have $100k to invest in real estate, you can afford a 20% down payment and closing costs in many markets. And you might also be able to cover renovation expenses and the cost of furnishing the space.

Fix-and-flipping is another traditional way to invest $100k in real estate. You buy a fixer-upper, renovate the property, and resell it as quickly as possible. The goal is to get a quick return on your investment. And, in a seller’s market, flippers can make a lot of money.

With a $100k investment, you can probably cover the down payment and closing costs in an affordable market. But the construction costs for a flip can be substantial. You may need some creative financing to make a flip feasible on your own.

Investing in multi-family rentals is similar to the buy-and-hold model, but it involves purchasing a property of more than one unit. Multi-family properties are naturally more expensive than single-family properties of comparable quality. They are typically larger structures on larger lots, and they generate rental income from multiple households.

This means your $100k real estate investment might not go as far with multi-family residences as with single-family homes. The housing market would need to be extra affordable for your investment to cover a 20% down payment plus closing costs. And instead of getting just one unit market-ready, you would need to get all the units ready for renters.

Moving away from the residential market, you might decide to invest your $100k in commercial property. Commercial property comes in many forms, including:

As with residential buy-and-hold properties, commercial investors typically purchase a property and rent it out on a long-term basis. But, instead of renting to individuals, commercial owners often rent to businesses.

$100k could be enough for a down payment and closing costs in some markets. But getting a loan to buy a commercial space might be more difficult than getting a loan for a residential property. One upside is that you probably won’t need to invest in renovations; the lessee usually pays for “tenant improvements.”

To this point, each of our ways to invest $100k in real estate has involved purchasing a property. Now we want to offer a few ways to invest in real estate without buying property.

By purchasing stocks in real estate companies, for example, you’re able to invest in the real estate market without being an active owner. You avoid the complexities of dealing with renters and contractors, and you still get to share in the housing market’s profitability through increasing stock prices, dividends, or both.

With $100k to invest, you can spread your capital across many different individual stocks and index funds for thorough diversification.

REITs (Real Estate Investment Trusts) are essentially companies that own income-generating real estate. Investors who own shares of a REIT receive a portion of the profits generated by the properties in the form of dividends. Investors then have the option to reinvest their dividends to acquire more shares. This fosters exponential growth, which is one of the key benefits of investing early.

Just like with stocks, investors with substantial upfront capital can spread their funds across multiple REITs to create a diversified portfolio.

In general terms, joint ventures are when multiple investors go in on a deal together. Joint ventures are common in real estate, and you’ll find private Real Estate Investment Groups (REIGs) creating LLCs to invest in real estate.

For investors with $100k to invest in real estate, joint ventures can give you access to deals beyond your individual means. By working with other investors, you can afford larger properties with better returns. And $100k is a substantial investment for a joint venture, so you may be able to negotiate greater control over the direction of the deal (depending on your group of investors and the type of property you’re after).

Real estate crowdfunding has exploded in popularity over the last decade as technological and legal advancements made it possible for everyday investors to pool their funds to purchase investment properties. Crowdfunding is similar to joint ventures, except that the deals are publicly available, rather than privately arranged. This means deals are easier for investors to find. And since more investors are invited to join the project, investment minimums can be lower and bigger deals can be accessed.

For investors with $100k, you have the option of putting all of your funds into a single project, or you can spread your capital across multiple deals.

We have a complete article on crowdfunding pros and cons, but we will reiterate some highlights here for easy reference.

Real estate syndication topped our list of the best short-term investment options, but the fact is that it is also our top pick for long-term investment options!

If you’re not yet familiar with real estate syndication, you can think of it as next-level crowdfunding. It works the same way as crowdfunding: everyday investors pool capital to purchase a property, which is managed by the project’s sponsor. The difference is in the legal structure of ownership. With a syndicate, all investors of a specific project are named as members of the ownership LLC. This gives investors real ownership of the underlying real estate. This is typically not the case with general crowdfunding.

This stable legal structure and true ownership stake in the property gives syndication a distinct advantage over general crowdfunding.

And, with real estate syndication, you can invest in many of the investment types we’ve already discussed! Select syndication firms offer buy-and-holds, vacation rentals, fix-and-flips, and multi-family developments and rentals.

With the real estate experts at Gatsby Investment, you can confidently invest in any of our real estate investment options through real estate syndication.

We specialize in the highly-desirable Southern California housing market, offering a wide range of opportunities, covering everything from single-family flips to multi-family rentals to luxury estate development. Whether you’re looking for a short-term project or a long-term investment, we have something that will serve your goals.

With our low investment minimums, you can invest your $100k in a single project or spread your investment across multiple projects. Investment opportunities start at just $10k!