Category: Real Estate Investment

If you’re looking for ways to make money fast, you might be interested in short-term real estate investing and other smart options to park your money. These are strategies that can help you generate income, growth, and liquidity in a relatively short period of time, usually less than a year.

However, not all short-term investments are created equal. Some are more risky, volatile, and complex than others. Some also require more time, money, and expertise than others. That’s why you need to understand the pros and cons of each option, and how to choose the best one for your goals and risk tolerance.

In this article, we’ll explore some of the best short-term real estate investments and other places to park money, such as:

• Wholesaling real estate
• Airbnb rentals
• Real estate crowdfunding
• High-yield savings accounts
• Money market accounts
• Certificates of deposit
• Treasury bills
• Bonds
• Peer-to-peer lending

We’ll also explain the advantages and disadvantages of each option, and how to get started with them.

Wholesaling Real Estate

Wholesaling real estate is the process of finding and contracting undervalued or distressed properties, and then selling them to other investors for a profit. Wholesaling real estate can be a fast and lucrative way to make money with real estate, without buying, renovating, or managing any properties.

To wholesale real estate, you need to follow some steps, such as:

• Finding a good deal. You want to find a property that is below market value, in need of repairs, or facing foreclosure. You can use online platforms, such as Zillow, Trulia, and Realtor.com, to find and analyze potential deals. You can also use offline methods, such as driving for dollars, networking, and direct mail, to find off-market deals.
• Contracting the property. You want to secure the property under a purchase agreement, with a low or no earnest money deposit, and a contingency clause that allows you to back out of the deal if you can’t find a buyer. You also want to include an assignment clause that allows you to assign the contract to another buyer for a fee.
• Finding a buyer. You want to find an investor who is willing to buy the property for more than what you agreed to pay. You can use online platforms, such as Facebook, Craigslist, and BiggerPockets, to market and sell your deals. You can also use offline methods, such as signs, flyers, and referrals, to find and attract buyers.
• Closing the deal. You want to assign the contract to the buyer, and collect your assignment fee, which is the difference between what you agreed to pay and what the buyer agreed to pay. You don’t have to pay any closing costs, taxes, or commissions, since you’re not the actual seller of the property.

To illustrate how wholesaling real estate can help you make money fast, let’s look at an example:

• You find a fixer-upper for $100,000, and contract it for $105,000, with a $100 earnest money deposit, a 30-day inspection period, and an assignment clause.
• You find a buyer who is willing to pay $120,000 for the property, and assign the contract to them for a $15,000 fee.
• You close the deal and collect your fee, which is a 14,900% return on your investment, or a 178,800% annualized return.

The advantages of wholesaling real estate are:

• You can make money fast, usually within 30 days or less.
• You don’t need a lot of money, credit, or experience to get started.
• You don’t have to deal with the risks and hassles of owning, renovating, or managing properties.

The disadvantages of wholesaling real estate are:

• You have to find and contract good deals, which can be competitive and challenging.
• You have to find and sell to buyers, which can be time-consuming and stressful.
• You have to comply with the laws and regulations of your state, which can vary and change.

• Airbnb rentals. Airbnb rentals are properties that you rent out to short-term guests, using online platforms, such as Airbnb, VRBO, and HomeAway. Airbnb rentals can be a great way to make money with real estate, especially if you have a spare room, a vacation home, or a property in a tourist destination.

To rent out your property on Airbnb, you need to follow some steps, such as:

• Creating a listing. You want to create a listing that showcases your property’s features, amenities, and location. You also want to set a competitive price, a clear cancellation policy, and a flexible availability calendar. You can use online tools, such as AirDNA, Mashvisor, and PriceLabs, to analyze and optimize your listing.
• Hosting your guests. You want to host your guests and provide them with a comfortable, safe, and enjoyable stay. You also want to communicate with them, check them in and out, and handle any issues or requests. You can do it yourself, or hire a co-host or a property manager to do it for you.
• Receiving the payments and reviews. You want to receive the payments and reviews from your guests, after they complete their stay. You will receive the payments minus the Airbnb service fees, which are usually 3% of the booking amount. You will also receive the reviews, which are ratings and comments from your guests, based on their experience. You can use the payments and reviews to improve your cash flow and reputation.

To illustrate how renting out your property on Airbnb can help you make money fast, let’s look at an example:

• You have a two-bedroom, one-bathroom condo in Miami, Florida, that you use as a vacation home. You decide to rent it out on Airbnb when you’re not using it.
• You create a listing that highlights your condo’s ocean view, balcony, pool, and proximity to the beach. You set a price of $150 per night, a moderate cancellation policy, and a minimum stay of two nights. You use AirDNA to compare your listing with other similar listings in your area, and adjust your price and availability accordingly.
• You host your guests and provide them with a clean, cozy, and convenient stay. You communicate with them, welcome them, and answer their questions. You also hire a cleaning service to clean and sanitize your condo before and after each stay.
• You receive the payments and reviews from your guests, which are positive and satisfactory. You earn $2,700 per month, which is the average occupancy rate (60%) times the average nightly rate ($150) times the average number of nights (30). You pay $810 in Airbnb service fees, $500 in cleaning fees, and $300 in utilities. Your net income is $1,090 per month.

The advantages of renting out your property on Airbnb are:

• You can make money fast, usually within a few days or weeks.
• You can leverage your existing property, without buying or renovating anything.
• You can enjoy the flexibility and control of your schedule and pricing.

The disadvantages of renting out your property on Airbnb are:

• You have to deal with the competition and seasonality of the market, which can affect your occupancy and income.
• You have to comply with the laws and regulations of your city, state, and country, which can vary and change.
• You have to deal with the risks and challenges of hosting strangers, such as damages, disputes, and complaints.

Real Estate Crowdfunding

A fifth way to make money fast with real estate investing is to invest in real estate crowdfunding. Real estate crowdfunding is a form of online investing, where multiple investors pool their money to fund real estate projects, such as development, renovation, or acquisition. Real estate crowdfunding can offer access, diversification, and transparency, without the hassle of being a landlord.

To invest in real estate crowdfunding, you need to follow some steps, such as:

• Finding a good platform and project. You want to find a platform that is reputable, reliable, and regulated. You also want to find a project that is attractive, feasible, and profitable. You can use online platforms, such as Fundrise, RealtyMogul, and CrowdStreet, to find and compare different platforms and projects. You can also use offline methods, such as attending events, joining groups, and asking for referrals, to find and vet potential platforms and projects.
• Financing the investment. You need to have enough money to meet the minimum investment requirement, which can vary depending on the platform and the project, but typically ranges from $500 to $25,000. You can use your own savings, borrow from family or friends, or use a self-directed IRA or 401(k) to invest in real estate crowdfunding. You also need to understand the fee structure, the return structure, and the risk structure of the investment.
• Receiving the returns. You need to wait for the platform and the project sponsor to execute the project and generate income and appreciation. You will receive periodic reports and updates on the performance and progress of the project and the investment. You will also receive regular distributions of cash flow and profits, according to the agreed terms and conditions. You will also receive a final payout when the project is completed and the investment is liquidated.

To illustrate how investing in real estate crowdfunding can help you make money fast, let’s look at an example:

• You invest $10,000 in a real estate crowdfunding project that acquires and renovates a 50-unit apartment building in Atlanta, Georgia. The platform charges a 1% annual management fee, and the project sponsor charges a 15% performance fee. The project offers a 10% preferred return and a 50/50 profit split to the investors.
• The project sponsor buys the property for $5 million, using a 70% loan-to-value (LTV) mortgage at 6% interest rate and 25-year amortization. The monthly mortgage payment is $21,331.
• The project sponsor spends $1 million on renovations, which takes six months to complete. The total holding costs, including mortgage, taxes, insurance, and utilities, are $300,000.
• The project sponsor rents out the units for an average of $1,500 per month, which gives a total monthly income of $75,000. The monthly expenses, including mortgage, taxes, insurance, maintenance, and property management, are $45,000. The monthly cash flow is $30,000.
• The project sponsor pays the investors a 10% preferred return, which is $100,000 per year, or $8,333 per month. You receive $83 per month, or $1,000 per year, as your preferred return, based on your $10,000 investment.
• The project sponsor also pays the investors a 50/50 profit split, after deducting the preferred return and the performance fee. The monthly profit is $9,167 ($30,000 – $8,333 – $12,500), of which 50% goes to the investors, and 50% goes to the project sponsor. You receive $46 per month, or $550 per year, as your profit share, based on your $10,000 investment.
• The project sponsor holds the property for two years, and sells it for $8 million, which gives a gross profit of $2 million ($8 million – $5 million – $1 million – $300,000). The project sponsor pays the investors a 50/50 profit split, after deducting the mortgage balance, the closing costs, and the performance fee. The net profit is $1,050,000 ($2,000,000 – $3,500,000 + $2,400,000 – $400,000 – $450,000), of which 50% goes to the investors, and 50% goes to the project sponsor. You receive $5,250 as your profit share, based on your $10,000 investment.
• You earn a total of $7,350 from your investment in the real estate crowdfunding project, which is a 74% return on your investment, or a 32% annualized return. You use this money to pay for your college tuition and fees, which are $10,560 per year for a public in-state college. You have enough money to cover more than half of a year of college, and still have some left over.

The advantages of investing in real estate crowdfunding are:

• You can make money fast, usually within a few months or years.
• You can access large-scale and high-quality properties, that you couldn’t afford or manage on your own.
• You can diversify your portfolio and reduce your risk, by investing in different types of properties, markets, and strategies.

The disadvantages of investing in real estate crowdfunding are:

• You have to rely on the platform and the project sponsor, who may not be trustworthy, competent, or transparent.
• You have to pay fees and commissions, which can eat into your profits and returns.
• You have to deal with the illiquidity and uncertainty of the market, which can affect your income and equity.

• High-yield savings accounts. High-yield savings accounts are bank accounts that offer higher interest rates than regular savings accounts, usually around 1% to 2% per year. High-yield savings accounts can be a safe and simple way to park your money, and earn some interest, without taking any risk.

To open a high-yield savings account, you need to follow some steps, such as:

• Finding a good bank and account. You want to find a bank that is reputable, reliable, and insured by the FDIC. You also want to find an account that offers a high interest rate, a low minimum balance, and no fees. You can use online platforms, such as NerdWallet, Bankrate, and MagnifyMoney, to find and compare different banks and accounts.
• Applying for the account. You need to provide some personal and financial information, such as your name, address, social security number, and income. You also need to verify your identity, such as by providing a photo ID, a utility bill, or a bank statement. You also need to fund your account, such as by transferring money from another account, or depositing a check or cash.
• Using the account. You need to use your account and enjoy the benefits of earning interest, without worrying about losing money. You can access your account online, by phone, or by ATM. You can also withdraw your money anytime, without any penalties, up to six times per month.

To illustrate how opening a high-yield savings account can help you park your money, let’s look at an example:

• You open a high-yield savings account with Ally Bank, which offers a 1.5% annual percentage yield (APY), a $0 minimum balance, and no fees. You deposit $10,000 in your account.
• You earn $150 in interest in one year, which is compounded daily and paid monthly. You pay no taxes on your interest, since you’re in the 10% tax bracket, and your interest income is below the standard deduction of $12,400.
• You withdraw your money after one year, and use it to pay for your college tuition and fees, which are $10,560 per year for a public in-state college. You have enough money to cover almost a year of college, and still have some left over.

The advantages of opening a high-yield savings account are:

• You can park your money safely, without any risk of losing it.
• You can earn some interest, without any fees or penalties.
• You can access your money easily, without any restrictions or limitations.

The disadvantages of opening a high-yield savings account are:

• You can earn a low interest rate, which may not keep up with inflation or taxes.
• You can face some competition and volatility, as the interest rates can change frequently and unpredictably.
• You can miss out on some opportunities, as you may be able to earn more money with other investments.

Money Market Accounts

A sixth way to park your money is to open a money market account. A money market account is a type of bank account that offers higher interest rates than regular savings accounts, usually around 0.5% to 1% per year. A money market account can also offer some features of a checking account, such as a debit card, checks, and online bill pay.

To open a money market account, you need to follow some steps, such as:

• Finding a good bank and account. You want to find a bank that is reputable, reliable, and insured by the FDIC. You also want to find an account that offers a high interest rate, a low minimum balance, and no fees. You can use online platforms, such as NerdWallet, Bankrate, and MagnifyMoney, to find and compare different banks and accounts.
• Applying for the account. You need to provide some personal and financial information, such as your name, address, social security number, and income. You also need to verify your identity, such as by providing a photo ID, a utility bill, or a bank statement. You also need to fund your account, such as by transferring money from another account, or depositing a check or cash.
• Using the account. You need to use your account and enjoy the benefits of earning interest, and having some access and convenience. You can access your account online, by phone, or by ATM. You can also withdraw your money anytime, without any penalties, up to six times per month. You can also use your debit card, checks, and online bill pay, to make purchases and payments.

To illustrate how opening a money market account can help you park your money, let’s look at an example:

• You open a money market account with Capital One, which offers a 0.8% annual percentage yield (APY), a $0 minimum balance, and no fees. You deposit $10,000 in your account.
• You earn $80 in interest in one year, which is compounded daily and paid monthly. You pay no taxes on your interest, since you’re in the 10% tax bracket, and your interest income is below the standard deduction of $12,400.
• You withdraw your money after one year, and use it to pay for your college tuition and fees, which are $10,560 per year for a public in-state college. You have enough money to cover almost a year of college, and still have some left over.

The advantages of opening a money market account are:

• You can park your money safely, without any risk of losing it.
• You can earn some interest, without any fees or penalties.
• You can access your money easily, and have some features of a checking account.

The disadvantages of opening a money market account are:

• You can earn a low interest rate, which may not keep up with inflation or taxes.
• You can face some competition and volatility, as the interest rates can change frequently and unpredictably.
• You can miss out on some opportunities, as you may be able to earn more money with other investments.

Certificates of Deposit

A seventh way to park your money is to buy a certificate of deposit (CD). A CD is a type of bank account that offers a fixed interest rate and a fixed maturity date, usually ranging from a few months to a few years. A CD can offer a higher interest rate than a savings or a money market account, but it also requires a longer commitment and a penalty for early withdrawal.

To buy a CD, you need to follow some steps, such as:

• Finding a good bank and CD. You want to find a bank that is reputable, reliable, and insured by the FDIC. You also want to find a CD that offers a high interest rate, a low minimum deposit, and no fees. You can use online platforms, such as NerdWallet, Bankrate, and MagnifyMoney, to find and compare different banks and CDs.
• Applying for the CD. You need to provide some personal and financial information, such as your name, address, social security number, and income. You also need to verify your identity, such as by providing a photo ID, a utility bill, or a bank statement. You also need to fund your CD, such as by transferring money from another account, or depositing a check or cash.
• Using the CD. You need to use your CD and enjoy the benefits of earning interest, and locking in a rate. You can access your CD online, by phone, or by mail. You can also withdraw your money at maturity, without any penalties, or renew your CD for another term.

To illustrate how buying a CD can help you park your money, let’s look at an example:

• You buy a one-year CD with Ally Bank, which offers a 1.2% annual percentage yield (APY), a $0 minimum deposit, and no fees. You deposit $10,000 in your CD.
• You earn $120 in interest in one year, which is compounded daily and paid monthly. You pay no taxes on your interest, since you’re in the 10% tax bracket, and your interest income is below the standard deduction of $12,400.
• You withdraw your money at maturity, and use it to pay for your college tuition and fees, which are $10,560 per year for a public in-state college. You have enough money to cover almost a year of college, and still have some left over.

The advantages of buying a CD are:

• You can park your money safely, without any risk of losing it.
• You can earn a higher interest rate, than a savings or a money market account.
• You can lock in a rate, and avoid the fluctuations of the market.

The disadvantages of buying a CD are:

• You can’t access your money easily, until maturity, or pay a penalty for early withdrawal.
• You can’t take advantage of rising interest rates, if they increase after you buy your CD.
• You can miss out on some opportunities, as you may be able to earn more money with other investments.

Treasury Bills

An eighth way to park your money is to buy treasury bills (T-bills). T-bills are short-term debt securities issued by the U.S. government, with maturities ranging from a few days to a few months. T-bills are considered to be the safest and most liquid investments in the world, as they are backed by the full faith and credit of the U.S. government, and can be easily bought and sold in the secondary market.

To buy T-bills, you need to follow some steps, such as:

• Finding a good broker and T-bill. You want to find a broker that is reputable, reliable, and registered with the SEC. You also want to find a T-bill that offers a competitive yield, a suitable maturity, and a low minimum purchase. You can use online platforms, such as TreasuryDirect, Fidelity, and Vanguard, to find and compare different brokers and T-bills.
• Applying for the T-bill. You need to provide some personal and financial information, such as your name, address, social security number, and bank account. You also need to verify your identity, such as by providing a photo ID, a utility bill, or a bank statement. You also need to fund your T-bill, such as by transferring money from your bank account, or using a debit card or a credit card.
• Using the T-bill. You need to use your T-bill and enjoy the benefits of earning interest, and having a guaranteed return. You can access your T-bill online, by phone, or by mail. You can also sell your T-bill in the secondary market, before maturity, if you need cash. You can also reinvest your T-bill at maturity, for another term.

To illustrate how buying a T-bill can help you park your money, let’s look at an example:

• You buy a 26-week T-bill with a $10,000 face value, and a 0.5% discount rate. You pay $9,975 for your T-bill, which is the face value minus the discount amount ($10,000 – $50).
• You earn $25 in interest in 26 weeks, which is the difference between the face value and the purchase price ($10,000 – $9,975). You pay no taxes on your interest, since T-bills are exempt from state and local taxes, and your interest income is below the standard deduction of $12,400.
• You receive $10,000 at maturity, and use it to pay for your college tuition and fees, which are $10,560 per year for a public in-state college. You have enough money to cover almost a year of college, and still have some left over.

The advantages of buying a T-bill are:

• You can park your money safely, without any risk of losing it.
• You can earn a guaranteed return, without any fees or penalties.
• You can enjoy some tax benefits, as T-bills are exempt from state and local taxes.

The disadvantages of buying a T-bill are:

• You can earn a low interest rate, which may not keep up with inflation or taxes.
• You can’t access your money easily, until maturity, or pay a penalty for early withdrawal.
• You can miss out on some opportunities, as you may be able to earn more money with other investments.

Peer-to-Peer Lending

A ninth way to park your money is to invest in peer-to-peer lending (P2P lending). P2P lending is a form of online lending, where individual investors lend money to individual borrowers, through online platforms, such as LendingClub, Prosper, and Upstart. P2P lending can offer higher returns, diversification, and social impact, compared to traditional lending.

To invest in P2P lending, you need to follow some steps, such as:

• Finding a good platform and loan. You want to find a platform that is reputable, reliable, and regulated by the SEC. You also want to find a loan that offers a high interest rate, a low default rate, and a suitable term. You can use online platforms, such as LendingClub, Prosper, and Upstart, to find and compare different platforms and loans. You can also use offline methods, such as reading reviews, ratings, and testimonials, to find and vet potential platforms and loans.
• Financing the investment. You need to have enough money to meet the minimum investment requirement, which can vary depending on the platform and the loan, but typically ranges from $25 to $100. You can use your own savings, borrow from family or friends, or use a self-directed IRA or 401(k) to invest in P2P lending. You also need to understand the fee structure, the return structure, and the risk structure of the investment.
• Receiving the returns. You need to wait for the platform and the borrower to repay the loan and generate interest. You will receive periodic reports and updates on the performance and progress of the loan and the investment. You will also receive regular payments of principal and interest, according to the agreed terms and conditions. You will also receive a final payment when the loan is paid off and the investment is closed.

To illustrate how investing in P2P lending can help you park your money, let’s look at an example:

• You invest $1,000 in a P2P loan that has a 12% interest rate, a 5% default rate, and a 36-month term. The platform charges a 1% service fee, and the borrower pays a 5% origination fee. The loan offers a monthly payment of $33.21, which includes principal and interest.
• You earn $195.56 in interest in 36 months, which is the total payment minus the principal ($1,195.56 – $1,000). You pay $19.56 in service fees, which is 1% of the total payment ($1,195.56 x 0.01). Your net income is $176 ($195.56 – $19.56).
• You receive $1,176 at the end of the term, and use it to pay for your college tuition and fees, which are $10,560 per year for a public in-state college. You have enough money to cover more than a month of college, and still have some left over.

The advantages of investing in P2P lending are:

• You can park your money and earn higher returns, than a savings, a money market, or a CD account.
• You can diversify your portfolio and reduce your risk, by investing in different types of loans, borrowers, and platforms.
• You can have a social impact, by helping people who need money for various purposes, such as debt consolidation, home improvement, or education.

The disadvantages of investing in P2P lending are:

• You have to rely on the platform and the borrower, who may not be trustworthy, competent, or transparent.
• You have to pay fees and taxes, which can eat into your profits and returns.
• You have to deal with the illiquidity and uncertainty of the market, which can affect your income and equity.

Tips on How to Choose the Best Place to Park Your Money

Besides exploring the best places to park your money, you can also use some tips and strategies to choose the best one for your goals and risk tolerance, such as:

• Assessing your financial situation and objectives. You want to assess your financial situation and objectives, such as your income, expenses, assets, liabilities, net worth, cash flow, and budget. You also want to assess your financial objectives, such as your time horizon, risk appetite, return expectation, and liquidity preference. You can use online tools, such as Mint, Personal Capital, and Wealthfront, to track and manage your finances and goals.
• Comparing and evaluating different options. You want to compare and evaluate different options, based on their pros and cons, and their suitability for your situation and objectives. You can use online tools, such as NerdWallet, Bankrate, and MagnifyMoney, to compare and evaluate different options, based on their features, costs, and benefits.
• Diversifying and balancing your portfolio. You want to diversify and balance your portfolio, by investing in different types of assets, markets, and strategies, that have different levels of risk, return, and correlation. You can use online tools, such as Portfolio Visualizer, Morningstar, and Finviz, to diversify and balance your portfolio, based on your risk tolerance, return expectation, and asset allocation.

Conclusion

Parking your money can be a smart and effective way to make money fast, and achieve your financial goals. By parking your money, you can enjoy the benefits of income, growth, and liquidity, without taking too much risk or hassle.

In this article, we explored some of the best places to park your money, such as:

• Wholesaling real estate
• Airbnb rentals
• Real estate crowdfunding
• High-yield savings accounts
• Money market accounts
• Certificates of deposit
• Treasury bills
• Bonds
• Peer-to-peer lending

We also explained the advantages and disadvantages of each option, and how to get started with them. We also gave you some tips on how to choose the best place to park your money, based on your situation and objectives.

We hope this article was helpful and informative, and inspired you to park your money and make money fast. If you need any help with finding, analyzing, or managing your money or investments, or any other financial needs, please contact us today. We’re happy to help you with your financial journey.