One of the most common questions I get is how to invest in real estate when not enough down payment is saved up to purchase a property, especially in expensive states such as California or New York. Sure, with programs like FHA you can put as little as 3.5% down, but in competitive markets, your offer will likely go straight to the recycling bin. Here are eight ways to get exposure and diversify into real estate, even without having six figures saved up.

1. Real Estate Investment Trusts (REITs)

REITs are companies that own and manage income-producing real estate. The majority of them are publicly traded but some are private, meaning they are not registered with the SEC. They may also be registered but not traded on the stock exchanges. REITs don’t pay any corporate tax if they meet certain qualifications, such as holding 75% of its asset in real estate and distributing over 90% of its income as dividends.

REITs can be good investments for the following reasons:

• Liquidity: If the market shifts and you don’t like the REIT anymore, you can get rid of it by the push of a button. If you own physical properties, you don’t have this kind of luxury.

• Diversification: Some REITs specialize in unique and attractive sectors that regular investors wouldn’t have access to because they don’t have the knowledge, deal flow or capital to acquire and manage these properties. On top of diversification from regular stocks and bonds, you can pick growing sectors, such as data center, industrial or health care.

• Transparency: REITs, especially the publicly traded ones, have to make regular filings and disclosures with the SEC. This helps investors understand the current operation and ongoing risks.

However, the dividends are taxed as regular income, meaning if you are in a high-income tax bracket you could be paying 37% instead of the 15% for regular dividends. Be sure to also take a close look at the management and transaction fees to make sure they’re not eating too much into your returns. REITs are large and stable companies and have outperformed the stock market consistently. On top of the low minimum investment amount and passive nature, they should be a serious consideration for any beginning or serious investor’s portfolio.

2. Real Estate ETFs

If you don’t want to pick individual REITs but instead would like to diversify, you can consider real estate ETFs. An ETF, or exchange-traded fund, is a collection of assets in a single fund. They are publicly traded so you enjoy similar liquidity as with an individual REIT. Consider the following: VNQ, IYR, FREL, PSR, ICF, XLRE. Take a look at the REITs an ETF holds and make sure they are not in a declining sector.

3. Real Estate Mutual Funds

Real estate funds provide the same diversification; however, they are not as liquid. Their prices are only updated once a day. Some do have a large minimum investment amount, but many don’t or have a low amount. Keep in mind the expenses and fees, as some funds are actively managed instead of passively tracking an index or basket. You can search for the right one for you here.

4. Crowdfunding

Since the passing of JOBS Act in 2012, real estate crowdfunding sites have been able to take advantage of the more relaxed regulations to allow retail investors to become shareholders of a portion of a property. Some platforms do require you to be an accredited investor, which you probably aren’t if you’re having trouble saving up the down payment. However, there are some that do not require you to be accredited and have low minimum investment amounts, such as Fundrise and Realty Mogul.

5. Syndications

Syndications are similar to these crowdfunding sites, but they’re more private. You typically find and connect with sponsors at conferences, meetups, referrals or other in-person events. The minimum investment amount is usually higher, typically $25,000 or more. It takes careful work to find and vet the sponsors and deals, as opposed to crowdfunding sites that make it as easy to sort and browse for investments as shopping online.

6. Notes

You don’t always have to invest on the equity side of the capital stack. You can purchase debt, or notes, that are secured by the underlying asset and get paid on the interest. ExchangeLoans (formerly FCI Exchange), Paperstac and PPR are good places to look for notes that don’t require too much capital to purchase.

7. Hard Money Loans

Similar to notes, hard money loans are debt instruments made directly to other investors, typically flippers. Standard rates used to be 12%, but lately the lower interest rate and cheaper capital have led to more competition and 8% is fairly common now. You can take quite a bit of the risk out by getting to know the investors and how their previous flips have gone.

8. Turnkey Properties

So far, all the methods mentioned did not involve purchasing an actual property. Turnkey properties are meant to be completely hands-off for investors — you turn the key and cash flow comes out. Some of the bigger companies in this space include Roofstock and REI Nation, which have access to multiple markets, while some companies might be more specialized in one or two states. Turnkey companies take care of sourcing the property and managing it, often in markets where the property price is much lower, making it easier for beginning investors to get started.

Consider these vehicles if you don’t have your full down payment saved up. You might not be able to take advantage of the depreciation and leverage you traditionally would, but these methods will allow you to get that snowball rolling until you are able to purchase an investment property on your own.

Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify? Hsiao, Forbes Councils MemberForbes – Real Estate

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