Real estate investing doesn’t require a 20% down payment and a rental property. Several legitimate strategies let you start with a few hundred dollars or less.
REITs: Real Estate Without the Landlord Headaches
A Real Estate Investment Trust (REIT) is a company that owns income-producing real estate — office buildings, apartments, retail centers, warehouses. You buy shares like a stock. REITs are required to distribute at least 90% of taxable income to shareholders as dividends. You can invest through any brokerage account with as little as the price of one share.
Real Estate Crowdfunding Platforms
Platforms like Fundrise, RealtyMogul, and DiversyFund let you invest in real estate projects with as little as $10–$500. You pool money with other investors to fund commercial or residential properties. Returns come from rental income and property appreciation. Note: these investments are illiquid — you can’t easily sell your shares.
House Hacking
Buy a small multi-family property (duplex, triplex, or fourplex), live in one unit, and rent the others. Your tenants cover most or all of your mortgage. FHA loans allow you to buy a multi-family with as little as 3.5% down if you live there. This is one of the highest-leverage entry points for real estate investing.
Buy a Rental Property With a Low-Down-Payment Loan
FHA loans require 3.5% down for owner-occupied properties. Conventional loans for investment properties typically require 15–25% down, but if you live in the property for at least a year first, you can buy with much less.
Wholesaling (No Capital Required)
Wholesaling means finding distressed properties, putting them under contract, then selling that contract to an investor for a fee. You don’t buy the property — you sell the rights to buy it. It requires hustle and real estate knowledge, not capital.
Real Estate ETFs and Mutual Funds
Several ETFs focus specifically on real estate stocks and REITs. Vanguard Real Estate ETF (VNQ) and Schwab US REIT ETF (SCHH) are popular, low-cost options. You get diversified real estate exposure within a standard brokerage account.
The Risks to Know
- Illiquidity: real estate can’t be sold instantly like a stock
- Vacancy risk on rental properties
- Unexpected repair and maintenance costs
- Interest rate sensitivity (crowdfunding and REITs can be affected by rising rates)
The Bottom Line
You don’t need to be wealthy to start in real estate. REITs and crowdfunding platforms make it accessible with small amounts. House hacking is among the most powerful wealth-building strategies for those willing to live in their investment. Start with what fits your current capital, then scale.