Pinto Capital Investments

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Big-Bucks Real Estate: How to Invest One Million Dollars Successfully

You’re no slouch. You’ve been successful and you’re not afraid to show it. You’ve put in the long, arduous hours, you’ve made the sacrifices, and now you’ve got the money to prove it. Or maybe you inherited it. The question is: what do you do with it? With Pinto Capital Investments, you can generate long-term wealth that builds on your treasured earnings through smart, reliable acquisitions.

A million dollars is a million dollars. But what if you could turn one million dollars into ten million dollars or even one hundred million dollars? With a strong, durable real estate investment, the future of residual income has never looked brighter.

First Thing You NEED to Do with a Million Dollars

Let’s face it, you have options. You could invest in the stock market and play the game and ride the often-volatile rollercoaster. You can deal with stocks, bonds, and mutual funds and see where it takes you. If you want, you can take a chance on alternative investments with high risks and high rewards.

The smartest thing, however, that you can do is to make a realty investment. In these uncertain economic times, you want something dependable, durable, and powerful. You want a hedge against inflation. You want a way to secure your future for yourself, your loved ones, and those you care about.

With historically profitable investment properties, all of this is possible. There are several very important reasons you should put your big money into real estate. When you invest a million dollars in lucrative properties and land, the benefits can be enormous.

Top Reasons to Put a Million Dollars into Real Estate Investing

Imagine the possibilities. Countless reputable commercial brands are known to produce consistent revenue with high-profit margins. Then there is industrial real estate, like sprawling manufacturing facilities, massively filled warehouses, and bustling top-notch factories. If you like residential properties, a whole range of housing exists. Everything from sky-high apartment buildings to beachside estates.

Whether your property investment is a multifamily unit or a business park, or anything in between, you can rest assured knowing your capital is not being wasted. With a top investment expert at your side, the likelihood of success skyrockets. Merely consider the following primary reasons to invest that million dollars you value so much into real estate.

Can Create Multiple Income Streams

If you want a residual income that you depend on month after month, year over year, an investment strategy is key. Merely consider the case of rental income. In multifamily properties, even if some tenants leave or you have unit problems, you can always compensate with income from other units.

Whether you choose to invest one million dollars in an apartment complex, or fix and flip a gorgeous home, there are countless ways to put your money to work for you. However, nothing beats a recurring cash flow, which is why many big-money investors opt for rental properties that generate monthly income.

The bottom line is simple: there are many investment options in the realty business. By exploring more than one simultaneously, you can diversify your holdings, ensure capital preservation, and increase your net income.

Income Producing Real Estate Typically Appreciates

As of 2020, the national appreciation rate for homes was anywhere between 3% and 5%. Although these numbers have changed due to the global pandemic, realty investment still continues to be one of the wisest and most enduring investments (especially against inflation).

Simply consider all the ways property may appreciate. Whether you’ve hired a property management company to streamline an apartment building or are pouring money into improving other real estate projects, you have many ways to improve appreciation.

Start Investing, Start Appreciating

Inflation, local socioeconomic changes, and property changes can all lead to appreciation. Perhaps you invest in better construction materials. Maybe you remodel bathrooms, kitchens, or other rooms. If you own a large multifamily property, you could even add amenities like a pool or concierge service.

All of these adjustments can increase property value, drive up monthly cash flow, and turn a million-dollar investment into something far greater.

It doesn’t matter if you made a fortune running your own business, saved up frugally through the years, or came upon a lump sum through some other circumstance. What matters is that you put your one million-dollar investment to good use.

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With a top investment specialist at your side, you can boost your bank account and create a truly sterling and diversified portfolio.

Deductions and Depreciation Strengthen Personal Finance

Similar to appreciation, depreciation is another vehicle that allows you to protect or increase your net income. With depreciation, you can effectively deduct costs associated with purchasing and modifying rental properties. With depreciation, you can deduct these costs over the lifetime of the property and not in one year or a short-term period.

Rules of Depreciation and Deduction

However, there are rules. You can only depreciate such property if: you own real estate directly, you use it for your business or income purposes, it has a ‘useful life,’ and it’s expected to last over a year.

In addition to depreciation, you can also deduct costs associated with rental properties for a decreased tax liability. These expenses may include property taxes, travel and management expenses, repair and maintenance, mortgage insurance, and other professional services.

These traditional real estate benefits are some of the top attractions for any savvy investor. However, once you know why you should invest in real estate, the question becomes: what kind of property and land do you invest in? Furthermore, how do you invest in it?

Moving Forward with Traditional Investments in Real Estate

It’s okay if you’re filled with questions and concerns, but short on answers. After all, the real estate industry is complex, and the sheer volume of real estate investing opportunities can be overwhelming.

Should you use personal loans or private loans? Should you pursue venture capital? Should you borrow money for that big, gleaming project? Save with money market accounts? Should you join other investors in a tenancy in common (TIC)? How about trusts? Would your money be better off channeled into municipal bonds for public projects or government bonds for infrastructure?

Before you dive full-on into the world of smart and potentially lucrative investments, you should always consult a leading investment expert. Nonetheless, there are certain primary realty investments that are typically the best investments.

How to Invest a Million Dollars in Real Estate Crowdfunding

One of the best ways to invest 1 million dollars is through what is called crowdfunding. This investment strategy has become increasingly popular as the internet has exploded. With the availability, accessibility, and usability of the world wide web from literally any corner of the globe, crowdfunding is now more attractive than ever.

people with hands gathered in the middle

In some cases, an investor through these crowdfunding companies must meet certain minimum requirements to be accredited. This typically allows greater access to capital and more lucrative real estate investments. If you have one million dollars to spend, you more likely than not can meet the accredited conditions.

As of today, there are many real estate crowdfunding platforms, including CrowdStreet, DiversyFund, EquityMultiple, Fundrise, RealtyMogul, and more. Depending on your financial goals, your real estate projects, and your real estate investing experience, one or more may be ideal.

Why You Should Start Investing Through Crowdfunding

Through online fundraising, investors pool their capital to financially support future or present investment projects. Whether commercial real estate or residential property, investors can enjoy numerous benefits when crowdfunding.

Say for instance you want to invest a million dollars, but it’s not enough. There are many projects out there, but oftentimes you want to diversify your investments while still getting a piece of the action.

Without crowdfunding, your options may be limited. Perhaps you need to borrow money. With crowdfunding, you can invest less money in a property while still enjoying a higher return. You won’t have to tap into some emergency fund and your financial freedom will grow as a result.

Advantages and Disadvantages of Crowdfunding

If you have one million dollars to invest, you obviously want to make the most of it. Although this may be considerably more money than others have to invest, in some ways, it’s easier to lose. If you make one bad big-buck investment, the whole thing could go belly-up.

Advantages of crowdfunding include:

  • Usually pays bigger dividends than even traditional real estate of the highest quality.
  • Allows for diversification of investments across locations, property types, and values.
  • You can rely on property management to eliminate most landlord and owner concerns.
  • Comparatively lower upfront costs, make it easier to get in on big projects.

Disadvantages of crowdfunding include:

  • Various platform fees and expenses may apply.
  • Proceeds are likely taxable.
  • Divestment of assets is less fluid.
  • The inherent risk in many new, inexperienced crowdfunding platforms.

So as you can tell, there are a variety of reasons to invest in real estate through crowdfunding platforms and opportunities. However, you need to be careful to ensure you join a group of investors you can trust, and who help you reach your financial goals.

A financial advisor, investment specialist, and real estate professional can all help as you proceed with crowdfunding.

Putting Your Million into Direct Property Ownership

Direct owners are typically either s-corps, LLCs, or sole proprietors. With a million dollars, you may very well have the necessary cash upfront to purchase the property outright. However, if you don’t, there are always opportunities by borrowing money from banks or through private lending channels.

That said, if you choose private lending over traditional lending from a financial institution, be careful. There is a higher risk potential due to a lack of regulations. However, this may also translate into greater freedom to invest.

plenty of private beautiful houses

Whether you choose private lending to supplement your personal capital, or you choose to be a private lender yourself, it’s important to remember three things. Firstly, credit scores need to be evaluated. Secondly, competitive pricing strategies must be formulated. Thirdly, viable loan settlement schedules must be maintained.

In addition to understanding financing options, you also obviously need to know the type of property in which you’re investing!

What Every Investor Must Know About Direct Ownership

Remember, you directly own the property. That means you may have to manage all types of relationships and networks, including property management companies, brokers, realtors, accountants, lawyers, contractors, lenders, and more.

Directly owning property may be a great option for investors who have more time, energy, and money to devote. It is not the ideal choice for passive investors unless they can offload much of the responsibilities onto others (which can be expensive).

Generally, however, directly owning property can yield very long-term and significant passive income streams. Whether you invest in multifamily complexes, large estates, industrial lots, or commercial general stores, direct ownership often yields a relatively greater capital return.

Ways to Capitalize on Direct Ownership Real Estate Investing

There are many forms, types, and vehicles for direct ownership. Thousands of pages could be written on these various conceptions and real-world counterparts, but generally speaking, there are several prominent ways to capitalize.

The best part is you can spread your money around so that one good investment may offset a bad one. You can also, of course, join other more experienced investors to expand your success. There are multiple ways to capitalize on direct ownership. The two following are great for investors with big money.

How to Invest One Million in Tenancy in Common (TIC) Investments

Firstly, you can choose to invest in stakes of a larger property through what is called a tenancy in common (TIC). This is essentially a legal agreement whereby two or more co-owners share undivided and direct interests in property or land. There is no limit to how many owners there can be.

The TIC arrangement is ideal for investing in lucrative, large-scale projects, securing long-term cash flow, and diversifying through low-minimum investments. With a TIC investment, you can go all in on an amazing project or sprinkle your capital around all across the country.

Real Estate Investing Through a 1031 Exchange

This is essentially a vehicle under Section 1031 of the Internal Revenue Code whereby you can defer capital gains taxes. Essentially, you have to exchange one or more real estate investment properties for one or more other properties. The property given up is thereby ‘relinquished’ and the new property is considered the ‘replacement.’

two people shaking hands

You are expected to invest your proceeds from the sold property into the purchased property. In theory, you can continue relinquishing and replacing without ever paying these taxes. For instance, you could exchange a mountain lodge for a commercial general store. You could exchange an apartment complex for land. The opportunities are endless.

There are many ways direct ownership can grow your wealth while developing multiple passive income streams. Whether you choose to fix up a property and flip it, hold it over time and allow appreciation, live in a property and rent out part of it or another property, or just generally rent out properties, there are numerous opportunities for profit.

Investing in Real Estate Investment Trusts (REITs)

Unlike direct ownership, these trusts do not require you to manage or oversee properties. Additionally, Real Estate Investment Trusts (REITs) offer greater rewards and fewer risks than many other trusts. Essentially, these REITs are funds that own and operate real estate that produces income. Remember, not all real estate produces income. For instance, some vacant land.

Therefore, REITs are interested solely in those properties that generate wealth, such as apartment complexes, shopping malls, commercial brands, manufacturing plants, residential developments, and more.

You can think of REITs just as you would the stock market with exchange-traded funds, index funds, and mutual funds. Similar to these funds, REITs are traded publicly and oftentimes offer specialty assets that you could never access otherwise.

Like all investment types, however, REITs do have a lot of pros and cons that must be weighed.

Advantages and Disadvantages of REITs

While it’s always a good idea to seek independent financial advice, you should also have a strong understanding of REITs through research you do on your own. The last thing you want to do is make a critical mistake. Remember, volatility and unpredictability are always concerns.

Although risk and reward are relative terms, what matters is how you act and if you act at the right time. Without professional guidance, you could lose massive amounts of money either directly or indirectly, and find yourself dipping into an emergency fund, draining a high-yield savings account, or begging for peer-to-peer lending.

Advantages include:

  • Investors gain access to varied commercial projects, which are otherwise difficult to directly buy.
  • With high liquidity, REITs don’t require many of the resources other investments do to cash out.
  • REITs are generally considered durable, stable, and profit generative.

Disadvantages include:

  • You cannot deduct business expenses from taxable net income
  • REITs are linked to the ebbs and flows of the stock market, so if the market plunges, so too may a REIT.
  • Hikes in interest rates can prove disastrous for REIT values.

Overall, REITs offer many unique pros and cons that any investor, savvy or completely new, must thoroughly consider. With the help of a seasoned financial planner and investment specialist, however, an investor can navigate these challenges.

close up photo of monitor displaying graph

If you are interested in the stock market or have had success in the stock market, REITs may be especially attractive. They can certainly be an important part of any diversified investment portfolio. Whether using REITs, using crowdfunding for big projects, or owning property directly, you have many opportunities to grow your million dollars through realty.

Making the Most of Your Million Dollars

Whether you choose to engage REITs, crowdfunding, or traditional forms of ownership, the investment future can be very promising. Consult with a top investment mind, firm, or local real estate team to optimize your investment opportunities and receive the greatest return on your money.

Don’t fall victim to complacency, staring at your money as it stagnates. Don’t let it sit in a bank account doing nothing. If you have money to invest, you should act and you should act now. Realty is a historic hedge against inflation and now is the time to watch it work.

Don’t work tirelessly for your money. Make your money work tirelessly for you. At Pinto Capital Investments, we can help you make the most of your fortune with profitable, dependable real estate that pays time and time again. Seize the opportunity, take the next step, and learn how to invest big dollars for bigger returns today. Your future is waiting.

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%.