Start Investing with Under $20K: House Hack, BRRRR Lite, or Turnkey?

Many people believe you need a six-figure savings account to start investing in real estate. The truth is, you can begin building your portfolio with much less—sometimes under $20,000. The key isn’t about how much money you have, but how strategically you use it.

If you’ve been waiting for “the right time” to get started, this might be your sign. Here are three proven entry paths for first-time investors that can help you take that first step: House Hacking, BRRRR Lite, and Turnkey Investing.

1. House Hacking: Live Smart, Earn Smarter

The concept: House hacking means purchasing a property, living in one part of it, and renting out the other. The rent you collect helps cover your mortgage, allowing you to live for little or no cost while you build equity.

Example:Imagine buying a duplex and renting out one side for $1,200 a month. That rent might cover most of your mortgage, leaving you with minimal housing expenses. In some cases, you can even live rent-free.

Pros:

• Reduces your living costs while building ownership

• Generates steady cash flow

• Offers hands-on experience in property management

Cons:

• Limited privacy if tenants live nearby

• Requires time and effort to manage renters and maintenance

Best for: First-time buyers or young investors who want to lower expenses and start building wealth early.

2. BRRRR Lite: Build Equity, One Step at a Time

You may have heard of the BRRRR method—Buy, Rehab, Rent, Refinance, Repeat. It’s popular among investors who grow portfolios quickly. However, if you’re starting small, a lighter version, often called BRRRR Lite, can be just as effective.

How it works:Instead of buying large fixer-uppers, you focus on properties that only need light improvements, such as new flooring, paint, or fixtures. After upgrading and renting it out, you refinance to pull out some of your invested cash and use it toward your next purchase.

Pros:

• Builds equity and experience with manageable risk

• Allows you to reuse your initial investment

• Creates a repeatable, scalable system

Cons:

• Refinancing depends on market conditions and lender approval

• Slower progress compared to full-scale BRRRR projects

Example:Purchase a $120,000 home with $15,000 down, invest a few thousand in updates, and rent it for $1,200 per month. Once its value increases, refinance to access part of that new equity—giving you funds to reinvest.

Best for: Investors who prefer a hands-on but steady approach to growing their portfolio over time.

3. Turnkey Investing: Simple, Passive, and Predictable

For those who want to invest in real estate without managing properties or renovations, turnkey investing offers a simpler path. These are fully renovated, tenant-occupied homes managed by professional companies.

How it works:You purchase a property that’s already income-producing. The management team handles everything from rent collection to maintenance, while you receive regular income.

Pros:

• Truly passive ownership experience

• Generates immediate rental income

• Low involvement, ideal for busy professionals

Cons:

• Limited control over management decisions

• Returns can be lower than active investments

Example:A $100,000 single-family rental might require an $18,000 down payment. With tenants already in place, you start earning income right away while management takes care of operations.

Best for: Investors who prefer a hands-off approach or live far from the markets they invest in.

Final Thoughts

Getting started in real estate doesn’t require a fortune—it requires focus, planning, and the right strategy.

• If you want to learn the business while lowering your housing costs, try House Hacking.

• If you want to grow gradually and reinvest profits, explore BRRRR Lite.

• If you want completely passive income, consider Turnkey Investing.

The best strategy is the one that aligns with your goals, lifestyle, and comfort level. With the right plan, even a modest $20,000 can be the start of something much bigger.

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