Chris S

Good points by everyone, and another one is that real estate isn't very liquid.

You can put limit orders on stocks, options, etc. to manage your risk and limit losses. You can turn your portfolio on a dime if your assessment of it's return potential changes w/ minimal fees and no army of professionals holding their hands out for transaction costs.

Right now, there are untold #'s of real estate investors losing their asses and unable to get out of their investments.

I've thought about it to, but I prefer trading in the markets, where you actually have the advantage of agility and small lot sizes to trade over institutional investors.

SD_S2K

Sorry man, a house is not something you "play" with. And 12k is not enough to even play near one.

I see your quandary, but you are best to just sit on that cash for a while. Things are getting ugly in this world, and will not be improving till 2010 from what many analysts and professionals are saying

Malloric

Also, it's still pretty much impossible in most places to buy up rental homes and generate positive cash flow in most markets. Even if you look at it through rose colored glasses (property is always rented with responsible tenants who miraculously cause no problems, nothing ever breaks, etc) unless you put down a fat wad of cash for the down payment your mortgage/insurance/maintenance/taxes costs will almost always exceed the rental income + tax shield. In most cases you're betting on capital gains and rental appreciation to make your money.

It doesn't really look like we've hit the bottom of the market yet, and 12k isn't really enough anyway, so I'd wait and save up a bit more and use the time to research.