What Are the Various Ways to Invest in Real Estate?

Have you ever dreamed about investing in real estate, but felt overwhelmed by all the options?

Maybe you’ve wondered: What are the different strategies? Where do I even begin?

I’m diving deep into the many ways you can invest in real estate — from the classic to the creative. I’ll also share some of my personal journey and lessons learned along the way. Whether you're a newbie or looking to diversify, this guide will help you see the possibilities.

Why Am I So Passionate About Real Estate?

Let me ask you: Have you ever walked into a house, a building, or even a vacant lot and thought… what could this become? That’s what hooked me on real estate.

As a kid, I’d tag along with my parents to open houses or wander the aisles of Home Depot with my dad. It wasn’t just about houses or repairs — it was about possibility. I grew up glued to HGTV, watching people transform spaces. That same excitement followed me into adulthood.

When I bought my first property at 23 (a wild story I shared on the podcast — yes, it involved squatters and a Dodge Neon!), I realized real estate wasn’t just about buying and selling — it was about creating, improving, and imagining a better future.

The Main Ways to Invest in Real Estate

Let’s break down the most common ways you can invest in real estate. Some might be familiar; others may open up new ideas for you! Think about what aligns with your lifestyle, risk tolerance, and financial goals.

1️⃣ Single-Family Rentals

You buy a house — just like the one you might live in — and rent it out to a tenant. This is often the simplest entry point for new investors. The pros? It’s easy to finance with traditional mortgages, and tenant management is straightforward. But cash flow can be tight if your mortgage is high, rents are low in the area, or unexpected maintenance pops up. Vacancy (even for one month) can really affect your bottom line.

👉 Best for: New investors looking for manageable, hands-on experience.

2️⃣ Multifamily Properties

These include duplexes, triplexes, or quadplexes (typically up to four units — beyond that, properties are usually considered commercial). The beauty here is multiple income streams from one building. If one unit is vacant, the other units can help cover expenses. Plus, maintenance costs per unit tend to be lower since everything is under one roof. Financing can still use residential loans if under five units, making it accessible.

👉 Best for: Those ready to scale or looking for more income diversification.

3️⃣ House Hacking

This is where you live in one part of the property (like a unit in a duplex or a bedroom in a single-family home) and rent out the other spaces. It’s a brilliant way to lower or even eliminate your housing costs because your tenants’ rent helps cover the mortgage and expenses. In many cases, you can qualify for owner-occupant loans (FHA, VA, etc.) with lower down payments.

👉 Best for: First-time buyers who want to build equity while reducing living costs.

4️⃣ Short-Term Rentals

Think Airbnb, VRBO, or vacation homes. These properties are rented nightly or weekly, often at higher rates than long-term leases. They can generate strong cash flow, especially in tourist destinations or business hubs. However, they require more hands-on management (cleaning, guest communication) and may be subject to local laws that limit or regulate short-term rentals. Seasonality can also affect income predictability.

👉 Best for: Those in high-demand areas or who enjoy hospitality and management.

5️⃣ Fix and Flip

In this strategy, you buy a property that needs work, renovate it, and sell it at a higher price. Successful flippers know how to spot undervalued properties, estimate renovation costs accurately, and move quickly to reduce holding costs like taxes, insurance, and utilities. Profit margins depend on market conditions, renovation costs, and how well you manage the project timeline.

👉 Best for: People with renovation knowledge, project management skills, or a solid team.

6️⃣ Live-In Flip

Similar to a fix and flip, but you live in the property while renovating it. This can reduce costs (no extra rent or mortgage while you’re flipping), and may offer tax benefits — for example, if you live there for two years, you might avoid capital gains tax on profits (check current tax laws!). It’s a great strategy to build equity while improving your living space.

👉 Best for: DIY types or anyone looking to combine homeownership and investment.

7️⃣ Commercial Real Estate

This covers properties like office buildings, retail spaces, warehouses, and industrial facilities. Commercial leases often last longer (3-10 years), providing more stability, and tenants usually cover many expenses through “triple net” leases. There’s also room for creative vision — like converting a warehouse into co-working space or a retail store into a café. However, financing and management can be more complex.

👉 Best for: Experienced investors ready for higher stakes and creative projects.

8️⃣ Creative Cash Flow Ideas

Beyond the basics, think about ways to increase income from existing properties:

• Rent out a garage, shed, or yard space (e.g., for boat, RV, or equipment storage).

• Add coin-operated laundry machines or vending services.

• Rent out parking spaces separately (especially in urban areas).

• Create an accessory dwelling unit (ADU) or tiny house in the backyard.

Small, smart enhancements can significantly improve your cash flow over time.

👉 Best for: Owners looking to maximize the potential of properties they already have.

9️⃣ BRRRR Method

This stands for Buy, Rehab, Rent, Refinance, Repeat. It’s a powerful way to scale:

• Buy a fixer-upper (often at a discount).

• Renovate it to increase its value.

• Rent it out for steady income.

• Refinance to pull out your initial investment as cash.

• Repeat the cycle to build a portfolio with less money tied up.

We essentially did this with our first Brooklyn property before we even knew the term existed!

👉 Best for: Investors who want to grow quickly and are comfortable with renovations and refinancing.

Exploring the Many Ways to Invest in Real Estate: Strategies for Every Goal

When people think about investing in real estate, they often imagine buying a single-family home or rental property. But the reality is that there are so many different ways to get involved in real estate, whether you want to be hands-on or completely passive. Let’s break down some of the most popular—and even some lesser-known—real estate investment strategies.

Residential Real Estate Strategies

One classic approach is buying a multi-family property—such as a duplex, triplex, or fourplex. You could live in one unit and rent out the others. This is a powerful way to have your tenants cover your mortgage and living expenses.

Short-term rentals (like Airbnb or VRBO) are another common method. You can use your property as a vacation rental and potentially generate higher income than with long-term tenants.

If you’re interested in adding value, consider a fix-and-flip strategy—buying, renovating, and selling a property for profit. Or try live-in flips or house hacking, where you live in the property while renovating it, then sell after meeting requirements that could reduce or eliminate capital gains taxes.

Commercial Real Estate Opportunities

Commercial real estate offers numerous possibilities, from office buildings and retail spaces to industrial properties like warehouses or storage units. Self-storage facilities, in particular, have become popular for their profitability.

Mixed-use developments (for example, a store with apartments above) combine residential and commercial uses in one property. Raw land, timberland, and agricultural land provide other opportunities, whether for development, leasing, or subdividing. RV parks, mobile home parks, and tiny home communities are also gaining traction, often producing strong returns.

Business-Oriented Real Estate

Real estate can intersect directly with business operations. Think vacation rentals, co-living spaces, student housing, or senior living facilities. Co-living, where individuals rent rooms within a larger shared apartment, is especially popular in high-cost cities. Likewise, assisted living facilities are in demand as the population ages.

Other business properties include car washes and laundromats—owning the land and building and either operating the business or leasing it out to operators.

Partnership-Based Investing

You don’t have to go it alone. Many investors team up through:

• Joint ventures (JV) – Partnering with one or more investors, with everyone actively involved.

• Real estate syndications – A truly passive option where a sponsor handles everything, and you contribute funds. Minimum investments often start around $50K.

• Real estate investment groups (REIGs) – Pooling money with others to fund larger deals.

Websites like TribeVest help small groups pool capital, making larger investments more accessible.

Passive and Paper-Based Investments

If you prefer a hands-off approach:

• REITs (Real Estate Investment Trusts) let you invest in real estate via the stock market.

• Real estate crowdfunding platforms like Groundfloor or Fundrise allow smaller investments in a range of projects. With Groundfloor, for example, you can choose specific deals or use auto-invest features.

Mortgage notes and hard money lending let you act as the lender, earning interest payments while using the property as collateral. If the borrower defaults, you can choose to take over the property.

Tax lien investing offers another creative approach. You can purchase liens on properties where owners are behind on taxes—sometimes gaining ownership at a steep discount if taxes remain unpaid.

Specialized and Creative Structures

Other ways to build wealth through real estate include:

• Self-directed retirement accounts (such as a self-directed IRA or solo 401(k)) that hold real estate, offering diversification and permanent assets. These require careful planning and compliance with IRS rules.

• 1031 exchanges, where you sell an investment property and reinvest in a new one to defer capital gains taxes.

• Seller financing, where the seller acts as the bank, offering more flexible terms and skipping the traditional mortgage process.

• Subject-to deals, where you take over an existing mortgage (with lender approval), often benefiting from lower interest rates.

• Lease options or rent-to-own structures, which let renters build equity toward eventual ownership.

• The BRRRR method (Buy, Rehab, Rent, Refinance, Repeat), a popular strategy for building a portfolio over time.

Finding the Right Strategy for You

As you can see, the possibilities in real estate are vast. The key is to align your investment choice with your goals: Are you looking for a home for yourself that generates rental income? Do you want purely passive income? Are you focused on long-term wealth-building or immediate cash flow?

It’s important to assess your resources, risk tolerance, and vision for the future. With so many options, there’s almost certainly a real estate strategy that can help you meet your goals.

If you’re ready to explore what’s possible for your first (or next) real estate deal, consider working with a coach or advisor who can help you design a plan that fits your unique situation. The right investment could be closer than you think!

Final Takeaways

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