Living in an Ice Cream Castle

A Guide to Real Estate Investing, even when you don't think you can afford it

A few years ago, I moved to San Francisco with my boyfriend, Alex. We found a cute studio apartment in North Beach and were excited to start our lives together in the city. Around the same time, many of our childhood friends from the midwest started buying houses and apartments. While this never bothered me, I got the sense Alex was a bit bummed we wouldn’t have a true place of our own for a long time (if you think the SF rental market is crazy, just check out the buyer’s market). 

As the end of our first lease was approaching, I decided to surprise Alex with the idea of going house shopping - and not just normal house shopping, but high end house shopping. The plan was to rent a nice car, dress up in SF chic (although my brother in LA claims there is no such thing) and we would hop around town crashing the biggest open houses in the city.

While the day was incredible, filled with free cookies and lemonade, the last house gave us a bit of a wakeup call. We were touring a $10 million home in Pac Heights when the real estate agent came up to us and asked our thoughts.

“Soooo, how are we liking the place? Can you believe what a great deal this is in the heart of the city? And how about the extra space for the future fam?”

$10 million for a 3 bedroom house…. And it was a deal? I paused and snarkily responded, “I’m not sure it’s big enough.” And we walked out. 

At this point, I felt more disheartened than fulfilled and it was Alex’s turn to flip the mood. He immediately brought me to Swenson’s ice cream and said, “I know you probably want a whole pint, but maybe a scoop will do for now?”

And that leads me to today’s topic, fractional real estate investing - because even if you can’t have the whole thing, it doesn’t mean you don’t deserve a scoop. 

WTF are you talking about?

Investing in real estate can feel extremely unattainable and even now more than ever. For the purpose of this article, I’m gonna talk about fractional ownership, REITs, and other ways you can get real estate exposure without breaking the bank and your morale. 

What do real estate and ice cream have in common?

  1. They’re Sweet - Real Estate is one of the most popular investments. Your friends and family probably often tell you that renting is lighting money on fire and property ownership is the way to go. Well, I’m here to say IT DEPENDS! I for one love ice cream and eat it almost every day. That being said, there are all sorts of ice cream and some healthier than others. The same goes for real estate. Some markets are healthy, some are overly inflated. It doesn’t mean you can’t find a sweet deal, just take the time to choose wisely.

  2. Don’t Overdo It - I often overdo it with ice cream. In fact, last night I ate a pint of Ben and Jerry’s for dinner (Phish Food is the GOAT). While this was my reality, I probably could have just eaten a few scoops. You can do the same with real estate. Just because you don’t have the funds to buy a $10m or even a $150k condo doesn’t mean you won’t eventually. It also doesn’t mean you can’t “take a bite” in the meantime. Real estate is often risky and buying a physical asset is way less liquid. So don’t try to bite off more than you can chew and figure out exposure that makes sense to you now. 

  3. There are Many Flavors - I effing love chocolate ice cream. Other flavors just don’t really speak to me, but you may think otherwise (just don’t @ me with vanilla). When thinking about real estate investing, there are tons of different ways to get exposure and many ways with less risk and I’m going to walk you through some options below.

Alright, how do I invest?

  1. Fractional Ownership: This is a direct property investment as a percentage share instead of buying the whole property. Essentially, it means buying a home or other property among a group of buyers. 

    How do I invest? Ever have a friend say, “Hey, we should buy this place in Tahoe together?” Well, turns out you can. You just need to set up the legal agreement first and there are a few ways to do this. 

    For example: Let’s say my friend Ben wants to go in on a condo at Squaw Valley with me and Alex. Ben is bougie. In order to buy the place together, first we need to set up an LLC or LLP. You can do this by filing for one here. Each party will own a certain percentage ownership of the LLC or LLP. Then, you will need to make an offer on the property, apply for a mortgage on behalf of the LLC/LLP, and depending on the ownership structure, that is how you define your ownership of the property. For instance, if we all own 33.3% of the LLC and we buy the house on behalf of the LLC, we will each own 33.3% of the property. 


    • Limited Liability: If things go sour, you will not necessarily be liable but rather the LLC/LLP will be held liable. For instance, if the buyers cannot pay the mortgage, lenders can come after the company but not necessarily the individuals and their personal assets. Don’t worry Ben, they will not take your 2007 Ford. 

    • Pass Through Income: LLCs pass through income to individual owners. This means, you will not be taxed at the corporate level but rather as an individual owner. 


    • Financing: It can be a lot tougher to get loans as an LLC. Banks tend to prefer giving loans to individuals (they love a good credit score) while LLC trust can be harder to establish. So, if you don’t have the ability to purchase the property collectively in cash, you might need to reconsider this option. 

    • Personal Liability: Liability isn’t totally off the plate. This matter gets a bit more complicated though, so if you’re considering doing this, you might want to talk to a lawyer. My blog is not financial advice and it is most certainly not legal advice. Skincare advice though, yes.

    Additional Notes: This is a highly simplified version of fractional ownership. You can set specific rules and times (think about your grandpa’s timeshare) individuals can spend in the properties and negotiate terms. You also must keep taxes in mind as you will be individually responsible for paying taxes given your percentage ownership. 

  2. REIT: A REIT (a real estate investment trust) is a company that owns or finances income-producing real estate across a range of property sectors.

    How do I invest? Typically you can invest in REITs on the stock exchange. In fact, there are over 225 REITs currently listed in the US alone. While I can’t direct you to any specific ones, I would recommend evaluating them similarly to how you evaluate stocks (check out last week’s article on how to pick stocks for guidance). 


    • Liquidity: Most REITs trade on the stock exchange, so you can trade in and out of them like stocks. That means, they are highly liquid unlike typical physical real estate investments. 

    • Steady Income: They typically offer a steady income stream to investors. Essentially, the investment managers invest in a multitude of income bearing properties like apartment complexes, hotels, offices, etc and often distribute income (rent; interest on mortgages) as dividends. 


    • Cap Appreciation: REITs don’t typically appreciate as much as stocks. Instead, they are more stable and income producing via dividends. 

    • Divs Taxed as Regular Income: This means you need to pay full tax on dividends you receive while other stocks may warrant qualified divs which are charged at a lower rate. You can read more about them here.

    • High Management Fees: REITs are actively managed which means there is a team behind them picking the investment properties. As a result, they can be more expensive than your typical ETF or index fund. Fees will range, just be mindful of them when doing your due diligence. 

    Alternatives: Now onto my favorite section, alternatives. Today, there are tons of different companies working to democratize access to real estate and I’m going to share some of my favorites. 

    Fundrise: Fundrise is an online investment platform working to democratize access to private real estate. They offer a number of funds and access points starting at a minimum investment size of $1,000. They essentially use technology to identify real estate investment opportunities and invest in them on your behalf through a fund (a pool of investor capital). You can use my personal code here if you want to check them out.


    • You do not need to be accredited 

    • Great for Passive Investing (they do the work for you)

    • Highly Diversified


    • Liquidity: You need to think long term with this one. Your investment typically will be locked up for at least 5 years. If you need the money prior to that, you will be subject to fees. 

    Lex: Lex is a commercial real estate marketplace. Through the LEX marketplace, investors can ​buy​ shares of commercial real estate buildings, ​earn​ income, and ​sell​ those shares without restriction.


    • You do not need to be accredited 

    • Investment Minimum is $250

    • Transparent Fees (quarterly management fee of .25%)

    • Liquidity: no holding periods; you can take out money at any time


    • Newer company (founded in 2017) & less of a track record

Things to Be Mindful Of:

  1. Exposure: When investing in real estate, keep in mind how much exposure you have to it. For instance, if you already own a home and a rental property, you might not need additional exposure through the alternative means in which I spoke about. The real estate market fluctuates, so make sure you don’t have all your eggs in one basket. Most investment management firms recommend exposure ranging from 4-20% of your portfolio. 

  2. Home Ownership: If you are ready to buy a home, I am going to talk about home ownership next week including tax efficiencies, how to collateralize, how to think about mortgages, and my thoughts on the market as a whole. If you have any specific q’s along the way, let me know!

What’s next?

Thank you for reading!! If there is a topic you want to discuss, please DM me on Instagram at @notyourbfsinvestmentadvice or email me at I also am building a company called Tardi - a financial wellness and investment platform. If you’re interested in joining the beta, sign up here:

See you next week lover!

Disclaimer: All investment strategies and investments involve risk of loss. Nothing contained in this website should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.