If you're looking to invest $100,000 in the Los Angeles real estate market, you can choose to acquire either active or passive investments depending on your goal. Some of the benefits of investing in the Los Angeles real estate market include the potential for steady cash flow, long term appreciation and tax advantages.

Before you dive in, keep in mind that most real estate investments come with risks and that the Los Angeles real estate market is a highly competitive one. It is therefore advisable to seek advice from a trusted financial advisor and real estate professional before making any decisions.

As an investor with $100k, here's a general guideline on how to approach real estate investing in Los Angeles.

Key Takeaways

• Becoming an active investor or a passive investor are two possible options for aspiring investors with $100,000.
• Practical strategies for investing in the Los Angeles real estate market include purchasing a second home, fixing and flipping, real estate crowdfunding, investing in real estate investment trusts, and investing in commercial real estate.
• Real estate investments in the Los Angeles market offer a range of benefits, including diversifying your portfolio, generating a steady income, and the potential for your property's value to grow.
• It is advisable that you consult a qualified financial advisor and a real estate professional before you start investing in LA's real estate market.

Disclaimers

The contents of this article are for educational purposes only. They are not intended to be a source of professional real estate advice. You will find experts on real estate investing here.

Work with the best real estate professional in Los Angeles!

Ila Corcoran is a licensed Realtor and SVP of Real Estate Operations and Advisory services at Bay Street Capital Holdings. As a long time resident and accomplished Realtor based in Los Angeles, Ila has a deep understanding of the LA real estate market.

Her career started off in commercial real estate after which she transitioned to residential real estate where she discovered her passion. With a Bachelor's degree, two minors from California State University Long Beach and a Real Estate License Ila is the perfect real estate professional to provide you with insights on how to invest $100k in real estate in Los Angeles. She can guide you on:

• Understanding the current trends in the local Los Angeles real estate market
• Profitable real estate investments that you can take advantage of in Los Angeles
• The criteria to use when selecting investment property in Los Angeles, that is within budget
• How to secure the best financing options for your real estate investment
• The potential risks associated with investing in the Los Angeles real estate market

As an investment advisor at Bay Street Capital Holdings, a Black-owned wealth management firm, Ila has closed over $10.4M in real estate deals and secured more than $2.2M in assets under management (AUM). She has also supported Resthaven in securing investment funds worth $25M from investors who shared the vision of safe and accessible accommodation options for individuals in diverse communities.

If you are looking for the best ways to invest your money in Los Angeles and the greater Southern California real estate market, get in touch with Ila today. She will help you come up with a plan that aligns with your investment goals.

Two common ways of investing in real estate

In 2023, the total value of the U.S. real estate market is estimated at $47 trillion and it is continuously expanding to accommodate the growing population.

As an individual with $100k, there are different ways in which you can invest in real estate in Los Angeles. To begin with, decide what kind of investor you want to be: do you want to become an active or passive investor?

As an active real estate investor, you’ll be involved in the process of acquiring, managing and potentially selling real estate properties with a goal of building wealth and generating income.

Passive investors on the other hand take a more hands-off approach to their real estate investments. They may invest in real estate investment trusts (REITs) or crowdfunding platforms without direct involvement in property management.

How to invest $100k in real estate

If you're looking to invest in the Los Angeles real estate market, here are some great ways to put your money into good use.

Purchase a second home using the $100k

The first way to get into real estate investing in Los Angeles is by acquiring a second home using the $100k. With the acquisition of a second home, you can tap into both rental income and potential appreciation in property value. You can use the $100,000 as down payment, use your primary residence as collateral and then take a mortgage loan to settle the pending payment.

Depending on the investment property that you want to acquire, you can either buy an apartment or single family home. If you're planning to use the home as rental property, keep in mind future expenses that you might have to incur such as maintenance, hiring a property manager and property taxes.

Fix and flip a house

House flipping is a common real estate investing strategy that involves buying a house that needs repairs or renovations, making those upgrades and then selling it at a profit.

With the $100,000 you can find a motivated seller in Los Angeles who wants to get rid of their house, fix it and then sell it at a good price to a willing buyer. This strategy can be more hands-on and requires good knowledge of the local Los Angeles real estate market as well as renovation costs.

Invest in REITs (Real Estate Investment Trusts)

If you prefer a more passive investment strategy, you can invest your $100,000 in REITs. A REIT (Real Estate Investment Trust) is a company that owns, operates or finances income-producing real estate across various sectors. These asset classes can fall either under commercial or residential real estate.

As an investor in LA, you can buy private or publicly traded REIT shares on major stock exchanges and then earn passive income in the form of dividends. Some of the top REITs in Los Angeles that you can invest in include Douglas Emmett (DEI) and Public Storage (PSA).

Real estate crowdfunding

Another popular way of investing in real estate in Los Angeles is through crowdfunding. Using this investment strategy, you can pool funds together with other investors to collectively finance various properties, such as residential, commercial or mixed-use developments across the city. This method provides access to real estate opportunities that might otherwise be out of reach for individual real estate investors.

By implementing this strategy, your $100,000 can be spread across multiple projects in Los Angeles, thus reducing overall risk.

Invest in commercial real estate

Another avenue of investing $100k in real estate is to invest in commercial properties like office buildings, retail space or industrial properties. Commercial real estate investments often require larger capital contributions, but if you choose to partner with like-minded investors, you can combine resources and acquire a commercial property. That way, you can earn money in the form of rental income.

Before you make any investment decisions, it is important to first conduct your own research so you can clearly understand the risks and rewards that are associated with investing in the Los Angeles real estate market. Consider seeking advice from a real estate professional, financial advisor and other experienced investors to help you make informed decisions based on your goals and risk tolerance.

Advantages of investing in real estate

• Rental properties provide a consistent income stream through monthly rent payments, which can help cover expenses and generate passive income.
• Real estate investment properties have the potential to appreciate in value over time, allowing investors to benefit from capital gains when they sell the property.
• Real estate adds diversity to investment portfolios, reducing overall risk by offering an asset class that often behaves differently from stocks and bonds.
• Real estate can be purchased with borrowed money, allowing investors to control a larger asset with a relatively smaller investment, potentially amplifying returns.
• Real estate values and rental income tend to increase with inflation, providing a safeguard against the eroding value of money over time.

Let's help you invest your $100k in real estate today!

Investing $100k in real estate presents a promising opportunity for long-term financial growth and stability. If you're looking for a qualified and experienced real estate investment advisor to help you, schedule for a session with Ila here.

Bay Street Capital Holdings

Founded by William Huston, Bay Street Capital Holdings is a successful Black-owned firm that specializes in financial planning and investment advisory services.

From 2021-2023, William Huston has been recognized by Investopedia as among the Top 100 Financial Advisors for 2021. In 2023, Bay Street has been recognized for it's excellent work in the real estate sector as a Finalist in the Wealthmanagement.com 2023 Industry Awards, for its partnership with Resthaven Properties.

The firm was founded to advocate for founders in diverse communities.

Sources

https://smartasset.com/investing/how-to-invest-100k-in-real-estate

https://learn.roofstock.com/blog/how-to-invest-100k-in-real-estate

https://www.mashvisor.com/blog/best-way-to-invest-100k-real-estate/