Real Estate Investing Education Center

How to Invest $100k in Real Estate

By Michelle Clardie on 07/24/2022
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!




Ways to Invest $100k


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. 


1. Residential Property for Long-Term Renters


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.  

The Benefits of Investing $100k in Residential Rentals


The Possible Drawbacks of Investing $100k in Residential Rentals

  • Hands-on management (or the expense of hiring a property manager)
  • Possible issues with renters failing to pay rent or damaging the property
  • Needing cash on hand for the unexpected expenses of property ownership (like when the air conditioner goes out)
  • All your cash is in one asset, so you don’t have the benefit of diversification. While real estate is a low-risk investment, smart investors prefer not to put all their eggs in one basket. 


2. Short-Term Rental Property


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. 

The Benefits of Investing $100k in Short-Term Rentals

  • Long-term appreciation
  • Higher nightly rental rates than long-term rentals
  • Tax breaks
  • A hedge against inflation

The Possible Drawbacks of Investing $100k in Short-Term Rentals

  • Higher vacancy losses than long-term rentals
  • More intensive management than long-term rentals due to the higher volume of guests
  • Regular expenses to replace linens, dishes, and furnishings as they are worn down, lost, or potentially stolen
  • No diversification of your $100k


3. Flipping a House or Condo


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.   

The Benefits of Investing $100k in Flips

  • If you can find ways to add value quickly and cost-effectively, the return potential is exceptional
  • Quick returns (assuming everything goes smoothly)
  • Control over the design of the renovated home

The Possible Drawbacks of Investing $100k in Flips

  • Lots of time required (either doing the work yourself or overseeing contractors)
  • Lack of skill and experience can hurt your bottom line
  • If the market stalls, it could be difficult to find a buyer
  • No diversification of your $100k





4. Multi-Family Rentals


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.

The Benefits of Investing $100k in Multi-Family Rentals

  • Long-term appreciation
  • Higher cash flows than you might see with a single-family home
  • Tax breaks
  • A hedge against inflation
  • More units mean less vacancy loss risk  

The Possible Drawbacks of Investing $100k in Multi-Family Rentals

  • Your $100k won’t go as far since multi-family properties are typically more expensive than single-family homes 
  • More units mean more management and more potential renter issues 
  • Unexpected maintenance costs for multiple units
  • Having more than one unit offers some diversification, but your funds are still tied up in a single structure


5. Commercial Property


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

  • Retail storefronts,
  • Offices,
  • Medical spaces,
  • Shopping centers, 
  • Restaurants, and
  • Recreational spaces.

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.”

The Benefits of Investing $100k in Commercial Property

  • Appreciation
  • Cash-flows
  • Tax breaks
  • A hedge against inflation
  • Longer lease terms than residential (often 1-10 years) 
  • Tenants usually pay the renovation cost to get the space the way they need it

The Possible Drawbacks of Investing $100k in Commercial Property

  • $100k might not be enough to cover the down payment and/or closing costs
  • Financing can be difficult to get
  • Requires specialized knowledge of things like CAM charges, triple-net leases, and tenant improvements
  • Higher risk of vacancy than residential real estate


6. Stocks in Real Estate Companies


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.

The Benefits of Investing $100k in Stocks

  • Higher liquidity than most real estate investments, which provides comparatively easy access to your capital
  • Easy to diversify
  • You have the option to invest with far less than $100k

The Possible Drawbacks of Investing $100k in Stocks

  • Stock markets typically have higher volatility than direct real estate investments
  • Your only ownership is a share of stock, no tangible asset 
  • No control over any asset


7. REITs


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. 

The Benefits of Investing $100k in REITs

  • Strong liquidity
  • Passive investment
  • The portfolio of properties is professionally managed

The Possible Drawbacks of Investing $100k in REITs

  • No control over which properties are held by your chosen REITs
  • No ownership over any tangible real estate; only shares in a company


8. Joint Ventures


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).  

The Benefits of Investing $100k in Joint Ventures

  • Access to bigger, better deals that you could acquire alone
  • The private nature of joint ventures makes them extremely flexible

The Possible Drawbacks of Investing $100k in Joint Ventures

  • Little regulation since joint ventures are private rather than public
  • Finding and being accepted by a joint venture can be extremely difficult
  • Decisions can be messy when multiple investors are involved in decision-making processes


9. Real Estate Crowdfunding


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.

The Benefits of Investing $100k in Crowdfunding

  • The benefits of whatever type of property you invest in (long-term rentals, short-term rentals, flips, etc.)
  • Low investment minimums
  • Access to deals beyond your means
  • The ability to easily diversify
  • Flexible investment options
  • Purely passive income; you simply choose the investment, and everything is handled for you

The Possible Drawbacks of Investing $100k in Crowdfunding

  • Short track record; this specific structure of investing only became available to the public in 2012
  • Some deals are only available to accredited investors
  • Lack of control over design or management decisions
  • Lower liquidity than stocks or REITs





10. Real Estate Syndication


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. 

The Benefits of Investing $100k in Real Estate Syndication

  • The benefits of whatever type of investment you chose (long-term rentals, short-term rentals, flips, etc.)
  • Low investment minimums
  • Access to deals beyond your means
  • The ability to easily diversify
  • Flexible investment options
  • Purely passive income
  • Potential for extremely high returns; annualized returns with an elite syndication firm can top 20%
  • Deal-by-deal control; you choose which specific project(s) you want to invest in 
  • Ownership of the underlying real estate
  • The project is expertly managed by the sponsor

The Possible Drawbacks of Investing $100k in Real Estate Syndication

  • Comparatively short track record
  • Some deals are only available to accredited investors
  • Lack of control over design or management decisions
  • Lower liquidity than securities


Investing Options with Gatsby Investment


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! 

Building a real estate portfolio is easy when you partner with Gatsby Investment. Start investing today by creating your free Gatsby account. Once your accredited investor status is confirmed, you’ll be able to choose your investment project(s) through our user-friendly online platform. Then you can relax, knowing that your investment capital is in the most capable hands!


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