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How to Invest $1 Million Dollars – Your Best Options For 2023

We have this old saying that goes, “cash is king”. Money is indeed a fluid and flexible asset, but in today’s world, you must be careful how you spend it. Real estate investment is a good option for those who want to expand their portfolio, but it may not be very comforting. A million dollars is a lot of money to work with but also a lot to lose.

Investing a million dollars is a big deal, but you can do it. You probably know that you need to diversify your investments and make sure you spread the risk out. But how do you ensure your money lasts for as long as possible, and how do you maximize your returns?

No shortcuts and no guarantees. But if you are attentive to the details and follow through, you can make money in real estate.

Buying a home is a bold financial investment. If you’re just starting out, it can feel like a lot to take on. That’s why it’s essential to understand the process before you begin. This article will explain how to invest one million dollars in a home. When you see the potential returns, it’s sure to get your creative juices flowing!

How to Invest a Million Dollars

Investing your money in real estate can be incredibly lucrative, and you need not be a stock market wizard to make money. If you have a million dollars or more to invest, here are the best ways to do it.

Real Estate Syndication

A real estate syndication occurs when several investors pool their money to buy a sizable piece of real estate. Real estate syndications offer investment options in various real estate assets, including apartments, land, commercial real estate, and other real estate assets.

Real estate syndication is an investment option worth considering if you’re interested in real estate investing but can’t handle it on your own. You can profit from owning a rental property through real estate syndications. The best part is that you won’t have to deal with the hassle of being a landlord.

In real estate syndication, a Sponsor transacts with many Investors 

The sponsor contributes the sweat equity as a deal manager and operator. This package includes investigating the property and collecting money. Additionally, the Sponsor purchases and oversees the day-to-day operations of the rental property. The majority of the financial equity comes from the investors.

Typically, the sponsor must provide between 5% and 20% of the total amount of the necessary equity capital. Investors then contribute between 80% and 95% of the amount.

What is Multifamily Syndication?

Multifamily syndication is the practice of a group of investors pooling their funds to purchase a sizable asset, such as an apartment building. Sponsors can make investments in real estate that they couldn’t make on their own.

To buy the property, the sponsor must raise the necessary finances, conduct due diligence on the property, and evaluate it. Multifamily syndication depends on finding several investors to help finance a deal. On the multifamily investment, these syndicators split the risks and rewards.

What is Commercial Real Estate Syndication?

Investors can pool their resources to purchase more reliable assets than any one of them could have on their own. Commercial real estate syndications are attractive to many real estate investors because they can diversify their portfolios by spreading their funds over numerous deals with different sponsors.

The sponsorship process involves you, the passive investor, locating a general partner or syndicator. The syndicator invests using their years of expertise in commercial real estate.

Legal framework for Real Estate Syndications

Real Estate

Syndications often get set up as a limited partnership or a limited liability company. The sponsor takes the role of a General Partner or Manager. The investors take part as passive members or limited partners.

Additionally, the LP Partnership Agreement and the LLC Operating Agreement outline the sponsor’s and Investors’ rights. These rights include the sponsor’s rights to payouts, voting privileges, and fees for administering the investment. These organizations exist to safeguard both the sponsor and the Limited Partners if the transaction fails.

Real Estate Syndications: Who is Involved?

The syndicator(s) and passive investors are the two main stakeholders in every real estate syndication investment.

The Property syndicator or General Partner

The real estate syndicators (or general partners) organize and manage the real estate syndication. Their duties include:

  • Creating a business plan
  • Obtaining funding for the deal
  • Investigating the property
  • Cooperating with the personnel in charge of the property
  • Deal underwriting
  • Bargaining with the vendor
  • Securing investment.
  • Asset administration.
  • Taking care of customer relations

The syndicator may be financially responsible for any debt associated with the deal, depending on the type and structure of the loan. Since they play such a crucial function, you should research and concentrate on their skills.

A reliable, competent, and experienced general partner can turn a lousy transaction around and make a great deal even better.

The Passive Real Estate Investor or Limited Partner

Passive investors who own a portion of real estate benefit from equity paydown, appreciation, and real estate tax. They also receive monthly (or quarterly) revenue dividends from the asset and ROI when they sell it.

Since you won’t participate in daily activities, you’ll have little influence over investment-related decisions.

As a limited partner, you will:

  • Put your money into a transaction
  • Study the quarterly reports
  • Pay attention to bank deposits
  • Send your CPA the K-1 tax form

In a real estate syndicate, the passive investor’s job is to provide a fraction of the money needed to buy the property. Passive investors obtain ownership stakes in the property in return. Every investor receives a portion of the earnings.

As a passive investor, you will not have to contribute much time or effort to the project beyond contributing your funds. You can earn passive income using this form of investment.

You won’t have to use any of your assets if the investment has debt problems.

However, since you do not influence corporate decisions, you can only rely on the syndicator to choose what is best for investors.

Revenue from Real Estate Syndication

The primary ways that the sponsor and passive investors gain from real estate syndication are

  1. Property Appreciation
  2. Rental income

The sponsor distributes rental income to investors. This distribution typically happens every month or every three months. However, the syndicator has the right to withhold payment if the project isn’t performing well or requires more reserves. In this situation, you will receive an accrued sum later or when the property gets sold.

In addition, when the worth of a property increases with time, the sponsor and investors also make more money.

Furthermore, sponsors frequently take 1% on average for the acquisition fee to source and acquire the property. However, depending on the transaction, it can be anywhere from .05% to 2%.

All investors receive a preferred return before a Sponsor splits the earnings from their services.

Preferred Returns

Preferred returns are cash payments given during the syndication project. Select returns depend on the rental income the multifamily apartment produces.

Before any funds get distributed to the General Partners, they are paid to the passive investors and typically range between 6% and 9% annually.

For instance, if you invest $500,000 in a syndicated deal and the return is 7%, you will receive $35,000 or $2,917 monthly ($35,000/12).

Syndication typically lasts for five years. So, at the end of the five-year deal, you will have earned $175,000.

In addition to receiving income from the tenants who rent apartments, multifamily properties can also profit from storage, parking fees, and laundry services. These buildings have upkeep, utilities, capital investments for rooftops and HVAC, lease staff salaries, and marketing.  

Dividends and Sale Proceeds 

Man in Suit

A 70/30 split is a typical arrangement for dividing property ownership in syndication. In this instance, the passive investors receive 70% of the entire equity for providing the funding, and the syndicator gets 30% in exchange for locating the deal and carrying out the plan.

The investor gets the majority of their anticipated return from this.

The two types of property value appreciation, forced appreciation and market appreciation comprise most of the value created in multifamily syndication.

Market Appreciation

What does real estate market appreciation entail? It is simply an increase in a property’s value due to factors like inflation, market fluctuations, or demand. Real estate will appreciate when there is a greater demand than supply.

Forced Appreciation

Forced appreciation often refers to improvements made to the property, such as upgrading the interior and exterior of the apartments. It frequently enhances or introduces amenities like dog parks, pools, and other services.

It also stabilizes the investment by raising occupancy and rents to market levels and ensuring that the tenant population is robust enough to make rent payments.

Cost-cutting is another method of forcing appreciation. Programs that cut down on water or power use could get implemented to boost a property’s market value significantly. This strategy aims at raising revenue while reducing expenditures.

Increased demand for rental property happens when a property’s value rises over time due to a thriving local economy, healthy population expansion, and good demand and supply. Because the future is unpredictable, deals that get firmly underwritten don’t depend on this kind of appreciation.

The final objective of most real estate syndications is to sell the rental property at its new, more significant value. The sale proceeds get divided between the manager and passive investors per the equity split. The investor gets paid according to what they hold.

Syndication and Crowdfunding

It would not have been easy to invest in real estate syndication only a decade ago if you didn’t have much money or the right connections. Even if you did have money, you had to be acquainted with someone who invested in unlisted real estate properties.

However, the JOBS Act passed in 2012 helped to establish several important sites for crowdfunding real estate. Real estate crowdfunding is a means to gather money for a large project from a large group of investors online.

Before approving a deal for their platform, investors review it. For investors to check, the REC offers the research and supporting materials. As soon as the investments get funded, they also ensure that things proceed according to plan.

Crowdfunded real estate syndications are more accessible, have fewer investment requirements, and provide potential investors with access to various project information.

How to Discover Sponsors and Syndication Opportunities

As a real estate investor, you always look for new ways to grow your business. You want to work with sponsors who will help you get deals done. Also, you want to find syndication opportunities to make more money with fewer investments.

Use The Internet

You can use numerous independent online platforms to search for syndication opportunities. Two of the best syndication platforms are Crowdstreet and Fundrise. These platforms have the facilities to help you do specific searches and discover the best syndication opportunities for your goals.


Depending on your location, there may be several real estate associations or clubs. That’s an excellent place to start. Locate them and network with other investors. You’d be surprised at the information you can gather from others who know what is happening in your neighborhood.

Meet with Sponsors

You get the chance to decide if a potential deal sponsor is someone you genuinely want to work with when you have face-to-face meetings with a select number of vetted deal sponsors.

Qualification Standards For Real Estate Syndications

Making Plan

Investors must first meet certain eligibility conditions before participating in real estate syndications.

  • You must either be an accredited or knowledgeable investor to be qualified for a real estate syndication.
  • You must earn at least $200,000 annually or $300,000 with a spouse.
  • As an alternative, an investor is also considered accredited if their net worth is more than $1,000,000.

However, sophisticated investors can also access various real estate syndications. A sophisticated investor must have extensive knowledge and expertise to qualify as a passive investor.

Pros and Cons of Real Estate Syndications

Pros for General Partners or Syndicators

Leverage: Multifamily syndication allows the sponsor to start a significant real estate investment by leveraging the pooled finances of other investors.

Increased Valuation and Equity: Like any real estate asset, the property’s value should progressively rise over time, boosting ROI. The equity that usually grows over time in a multifamily syndicated transaction is one of the main pros for the sponsor. Additionally, the value of a renovated property increases dramatically.

Control: You handle a sizable multi-unit rental property on behalf of all passive investors as the sponsor.

Tax advantages: Investors who own real estate receive tax advantages through their K-1 tax filings.


High setup expenses: Setting up a multifamily syndication investment requires significant upfront costs. These costs are a crucial problem to consider if this is your first time serving as a sponsor for this kind of real estate investment.

Challenging Fundraising: It’s not simple to enlist investors and raise enough money for a multifamily syndication project.

Pros for Passive Investors or Limited Partners

Passive Income: Investors receive monthly or quarterly passive income payouts.

Convenience: Investing in real estate syndication frees up investors from the headaches of overseeing apartments or properties.


  • Real estate syndications are typically high risk. One of the most significant risks is choosing the wrong partners.
  • Before investing, an investor must work with a reputable and knowledgeable real estate syndicator. It’s crucial to thoroughly investigate a potential real estate syndication firm before hiring them.

Invest in Rental Property

Rental Property investment offers a wide range of investment options. You can choose to Invest $1 million in:

  • Multi-family homes
  • Single-family homes
  • Fix-and-flip projects
  • Small commercial properties

You can spread investments across a variety of asset types. Remote real estate investing is a good option for investors who live in high-demand areas. And today’s technology also makes it simple.

In markets with greater yields, you can locate inexpensive real estate when investing remotely, and your sponsor can take care of the day-to-day administration of the property.

Since real estate may be leveraged or financed, your $1,000,000 investment will go further, yield more significant profits, and maybe spread out risks.

Rental property can be pretty rewarding in the long run. If you put 20% down ($100,000) on a $500,000 compact duplex and rent it out for a combined $4,200 per month, you can make a profit while paying the mortgage.

After you’re debt free, you can decide whether to keep renting the house out and generate an even greater net cash flow or sell it for a significant profit.

Independent Lending

Private lending is another way to invest $1,000,000 in real estate. Personal short-term loans can be given to individuals for debt relief or home improvements, as well as to small enterprises in need of additional working cash to grow, acquire equipment, or buy real estate.

You could take out a loan and then lend the money to another person for additional cash. Banks do just that. They take out a loan from the Fed, add a 3% markup, and lend the money to small-dollar borrowers like us.

Although the risk can be substantially higher than typical real estate investments, private or peer-to-peer (P2P) financing is also relatively simple to undertake through online platforms. As long as you don’t devote a sizable portion of your wealth to private and P2P lending, the possible profits from private lending should outweigh the risk.

In comparison to typical investments like stocks and bonds, yields have the potential to be substantially greater. On the other hand, private loans have lower liquidity because you typically commit your money for a long time.

If the borrower defaults, you risk losing your money unless a valuable item like real estate secures the loan. You should seek advice on how much money to set aside for personal lending from a financial advisor.

Foreign Investment

Investing abroad can provide new opportunities and benefits you may not find locally. For instance, investors can avoid yearly property and capital gain taxes by investing in the Turks and Caicos Islands.

If you buy a house that you’ll only reside in for part of the year, you can increase your ROI by renting it out while you’re away and delegating the management to a management firm.

A land register safeguards property rights, and the dollar is the accepted currency. To complete the acquisition or determine the future value of your property, exchange rates are not a consideration.

Invest in a Luxury Vacation Rental Property

There are many benefits of investing in luxury vacation rental properties. You can also think about purchasing a home that will appeal to families on vacation. Your ROI will rise along with your occupancy rate.

Some of the most common benefits include:

  • Increased property valuation
  • Tax deductions
  • Establishing professional relationships
  • Personal satisfaction

It’s essential to pick a place with a robust market, such as Cape Coral/Captiva, Charleston, Joshua Tree, or the Smoky Mountains.

They work effectively during strong financial markets and are fantastic for seasonal revenue. But in a downturn, they might be worse off than those close to big cities. If you have the money, buying during a down market may be your best option.

Invest in Real Estate Investment Trusts (REITs)

REITs are arguably the most straightforward way to invest in real estate, primarily commercial real estate. REITs are mutual funds that refer to commercial properties such as warehouses, industrial spaces, significant apartment buildings, office buildings, and retail spaces.

Each trust holds multiple properties. Thanks to a bit of investment, you can diversify your portfolio more. REITs won’t focus your entire real estate investment in a single local market area because they get frequently dispersed across different geographic regions.

One of the significant benefits of REITs is that they are legally compelled to distribute at least 90% of their net earnings to shareholders. As a result, they provide a great source of yearly income and may increase in value when the trust’s holdings get sold.

Stock Market


Investing in the stock market can give you massive short-term and long-term profits. You can make money from dividends and increase share prices. Stocks like Williams Companies and Diamondback Energy produce incredible dividend yields (at least 4%).

Additionally, real estate agents and brokers can invest in stocks owned by top brokerages, such as eXp Realty and Keller Williams. Remember that the stock market can, of course, be erratic. Some investments with high yields may also carry considerable risk.

Invest in Exchange Traded Funds (ETFs)

Exchange-traded funds are inexpensive, frequently based on well-known indices, that invest in either equities or bonds. You may, for instance, buy an ETF based on the NASDAQ-100 index. Since ETFs mirror the market and do not outperform, the fund’s composition will be identical to that of the NASDAQ-100.

ETFs are particularly crucial for investing in bonds since they let you purchase various bonds rather than just a few, allowing you to diversify your portfolio. There are no load fees for ETFs, in contrast to mutual funds.

Moreover, their expenditure ratios are low. The investment return they generate will therefore be all yours.


A business initiative like investment property, multifamily syndication, or real estate developments can be financed through crowdfunding when vast groups of investors contribute their money. Crowdfunding provides a unique opportunity to split $1 million across various ventures and asset classes.

Frequently, accredited investors are the only ones who can invest in the most lucrative crowdsourcing projects. The good news is that with $1 million to contribute, you have access to crowdfunding investments that other individuals don’t have.  

However, crowdfunding investments may also be challenging to buy and sell, making them less accessible than traditional assets like stocks, bonds, or even real estate. Additionally, you might be unable to get your money back when you need it since crowdfunding businesses have the right to restrict or stop withdrawals during economic turmoil.

Invest in a Business

One method of investing in a company is purchasing stock shares or ETF investors with a million dollars to work with invest directly in a business instead of going through the public exchange. One of the most successful methods to invest money is owning a business.

Investing in a business can be done in two ways. You can support as a partner in an existing business, purchase or start one of your own, or do both. It can be riskier but yield more significant returns to your firm. Due to the company’s proven track record, investing in an existing business has more negligible risk, but you’ll still need to have complete faith and confidence in your business partners.

In either case, investing in the proper firm and buying it can yield returns on your $1,000,000 investment far exceeding those of more conventional assets like certificates of deposit, annuities, bonds, and equities.

How to Prepare Yourself for Investment

Money in Hands

When you’re ready to start investing, it’s easy to feel overwhelmed by the numerous options available. Where and how do you start? While funding is a complicated process, there are a few key things you can do to make sure you get off on the right foot.

Recognize Your Financial Objectives

You should evaluate your long-term financial objectives if you have up to $1 million to invest. Are you interested in boosting your personal finance within a short time, or do you like to relax and take it easy?

Reaching your financial objectives is much simpler when you have a precise aim. You might aim to quadruple your money over a specific time frame, retire at a certain age, or produce a monthly cash flow to reduce your working hours.

Establish a Timeframe

Make tiny, doable steps to advance you along your route to financial success after you have determined where you want to be. Your timeframe is the amount of time you intend to keep an investment, depending on your age and investment objective.

A timeframe aids in determining the best short and long-term investing possibilities, your income requirements, and how much you are willing to risk. Your financial advisor can help you through this step. But it would help if you prioritized long-term plans over short-term plans.

Assess your Level of Risk Tolerance

We’re all familiar with the saying ‘high risk, high reward.’

A more significant potential return is exchanged for your readiness to bear an investment loss. However, you should determine the level of risk you’re willing to take. You can select the best investments by knowing your risk and reward tolerance.

Create an Emergency Fund

You may think you don’t need an emergency fund if you have a million dollars or more, but you can never be too careful. Life has a way of presenting you with obstacles, so it’s advisable to have a backup plan.

All emergency funds depend on individual circumstances. Yet, you’ll most likely need one regardless of your degree of wealth. Savvy investors know that having an emergency fund is a buffer between their regular spending and longer-term investments, giving them access to money if/when needed.

Your emergency fund should have enough money to cover three to six months’ living expenses. This cash will help you guard against unforeseen emergency costs and temporary interruptions in your income.

A reserve for unexpected expenses is a barrier between you and your investments. Keep a sizable chunk of your emergency savings in a high-yield savings account.

Eliminate Bad Debt

With a million dollars to invest, there is no justification for paying monthly installments on bad debt like credit card balances, auto loans, or even education loans.

However, not every debt is bad debt. If your real estate investment generates passive income, you can use debt and leverage cautiously. You can make money in many different ways. Borrowing money can result in far higher profits than employing your capital.


We all know the adage about not putting all your eggs in one basket. But what if you had a million eggs? That sounds like a lot of baskets.

You can do just about anything if you have $1 million to invest. You can buy several properties, invest in the stock market, or start your own business. But, just like with any amount, you’ll have to choose wisely. You can find suitable investments to help your nest egg grow with the right strategies.

The Next Step

You may be overwhelmed or confused if you have a million dollars to invest. Maybe you want to diversify your portfolio, or perhaps you want to know the best step to take. Pinto Capital Investment can help you make a solid plan, create the best strategies, perform due diligence, and make your investment profitable.

Anthony Pinto
Anthony Pinto
Anthony Pinto is the founder and CEO of Pinto Capital Investments (PCI), a real estate investment firm focused on acquiring affordable and workforce multifamily properties and apartment buildings through syndications. Since 2019, PCI has gone full cycle on 2 large apartment complexes (+100 units) with an IRR in excess of 85%.