In this post, I’m going to share strategies for how to get started in real estate without any money or experience.

In some of the strategies I mention, you don’t even need hard money loans, worry about interest rates, or a down payment. Buying rental properties doesn’t mean you need to worry about hard money loans or even try to get traditional financing options. It’s possible to do a real estate deal with none of those.

Yes, it is possible to get into the real estate game with little or no money. If you don’t have your first rental property yet, I’ll show you how to get started with no money and get your first deal.

Income from rental properties can be sweet when it’s done right, and that’s exactly what I’m going to show you how to do without any money or very little money in most cases and without a down payment.

It’s amazing how there are so many articles on the internet where you’re promised ways to get into real property investing with little to no money, and people recommend buying a house with 10% down. I’m not going to do that. I’m going to share some real ways you can start dabbling in real estate without any money, and I’ll also show you how to acquire properties with a very little bit of money out of pocket.

Keep in mind, real estate investing is hugely profitable because when you invest in a rental property, you are investing in a hard asset. There is a finite amount of it in the world. This is what makes it so valuable.

So, if you need to come to the closing table with a little bit of money for closing costs, it’s not too bad.

Even though some people suggest that it is impossible to get started without any money or years of experience, I tend to disagree. When I got started in the investing business I did not have a lot of liquid cash, but I was able to get things going, and so can you. It just takes a little bit of creativity. Real estate investors are some of the most creative people on the planet.

I will show you how to get started without any money, but you need creativity. That’s what real estate is all about. It’s less about having the money and more about knowing how to engineer the deal so that you can close on a property that you ultimately control all the upside of.

This post is specifically for someone interested in buying real estate that will cash flow but does not know where to start because they have little or no money, bad credit, or just don’t have enough cash to bring to the table in closing costs and don’t know how to begin investing because of how competitive the real estate market is. Maybe you’re interested in getting into the real estate game but don’t have a lot of money saved up, and you’re wondering if there’s a way to close on a deal with little to no money down. Or maybe you’ve been dabbling in real estate for a while now but haven’t had much success.

In this post, I’ll go over the 10 best strategies for investing in real estate without a lot of money or experience. I have personally used all of these strategies at different points in my real estate investing journey, so I am writing from first-hand experience. Most real estate property owners will not talk about these strategies because they will usually go straight to a lender. It is easy to do that once you have established yourself as a real estate professional with a few investment properties under your belt. However, everyone needs to start somewhere, so let’s figure out how you can acquire your first investment property.

I am an experienced real estate investor, so the strategies I share in this post can work for you, but I am not implying that you will be able to pull these strategies off 100% of the time. Some of these strategies are quite advanced, so it just depends on how much time you’re willing to put in to learn. You will need to put in some sweat equity to get the ball rolling if you don’t have a ton of cash sitting around.

What You Will Learn

Real estate can be a great investment opportunity, but it’s not always accessible to everyone. In this post, we’ll go over the 10 best strategies for investing in real estate without a lot of money or experience, and you will gain some insight into how to begin your journey as a real estate investor without spending hundreds of thousands of dollars.

You’ll learn how to get started with your first investment property, and it will be up to you to decide which real estate investment strategy you want to follow. I love real estate as an asset class because when you invest in real estate, it could provide you with both rental income from property ownership and market value appreciation over time if done right with patience.

Financing Real Estate

There’s no such thing as “no cash down” for most people because when you’re getting started in real estate, you inevitably need something upfront before a lender is willing to back your deal. However, there are certainly substitute financing and other creative options that might make sense depending on your situation.

When financing real estate using traditional loans, a small down payment is still required, but for some people, there are ways to get into the deal without any money and structure the deal in a way where you don’t have to bring any money to the table. Real estate is a low-liquidity asset class in comparison to other types of assets. What does that mean? It means that if you own a property and you need cash immediately, it will take you some time to be able to pull out cash from your property. You will need to either sell the property or do a cash-out refinance. This process takes time. You could get a home equity line of credit, but that can take time too. It’s not like the stock market where you have liquidity almost instantly.

Any sort of investment needs some degree of money as well as a high level of cash flow to be deemed lucrative. Investing in real estate using other people’s money (institutional or private money) is the hallmark of some of the most successful investors. Most investors who invest locally where they live have relationships with private money lenders in the area. Once you have a proven track record as an investor, they will be willing to back your deals too.

Why do investors use private money loans? It is because great investors master the art of investing in real estate without ever having to use their own money. Investing without using your own money frees up your cash for other things. Once you do a few deals, you will gain confidence and that’s when you can approach private money lenders. Private money lenders are also known as hard money lenders.

Additionally, all of this may be accomplished without requiring excellent credit or providing a financial statement. It all depends on the deal you’re looking at. If you are planning to get a hard money loan, the hard money lender may or may not need some money down. It depends on the structure of the deal and your relationship with the lender. For example, if you have a contractors’ license and the deal you need money for is a flip, the hard money lender will be more comfortable giving you the money for the deal because they will be able to see your past work. You need to think about where you can add the most value.

Investing in real property is an excellent way to take the first step toward achieving that much-desired financial independence. Consider it if you want to generate a consistent and dependable passive income. I’m aware that many individuals struggle with questions like “how do I begin investing in real estate?” or “where do I get the “capital” necessary to purchase a house?” I’m going to tackle those questions one by one in detail.

These are common questions for many individuals who want to invest but have never done a deal before. Investing in real estate is a time-honored method of amassing wealth. Put away the infomercials about tax liens and the books on how to get a free home from the government, and let’s dive into the nitty-gritty of how to get started in real estate with no money and no experience.

Common Reasons You Might Not Have Money To Get Started in Real Estate Investing

#1. You Have Bad Credit

The reality is that you don’t need a high credit score to be able to qualify for a real estate loan. I think it’s a common misconception that one needs to have flawless credit to be able to get a loan from traditional lenders. A friend of mine recently purchased a home with a credit score of 600. The minimum score to qualify for an FHA loan with most lenders is around 580. FHA loans are such a blessing if you’re a first-time homebuyer. If you meet those minimum requirements, you can get approved for an FHA loan with 3.5% down. You could also get a private money loan if you’re into flipping houses, and once you do the flip, you can immediately do a cash-out refinance and pull your money out.

#2. You Recently Got Divorced

A divorce can potentially turn your situation from someone who has their act together to someone who is now suddenly financially strapped, so that is understandable. The good news is that you don’t need a lot of money to get started in real estate investing, and it might actually be good to not have too many liquid assets sitting around in your case.

#3. You Don’t Make Enough Money

If you don’t make enough money to be able to invest in real estate, you can still dabble in real estate investment. Just a word of caution, before you sign any type of contract, take the time to do the math and make sure you are not overleveraging.

In other words, don’t borrow more than your ability to repay each month by thinking a tenant might cover those costs. You can’t afford to rely on a tenant and it’s best to have a few cash reserves in this case.

Having said all of that, don’t worry because there are many ways you can get started in real estate investing and start dabbling now even though you might have bad credit or not enough put for a down payment.

Real estate investing is not for the faint of heart. You need to have a real estate strategy when you get going, and it takes courage to begin purchasing real estate.

I know folks who have passed on opportunity after opportunity and just never felt comfortable pulling the trigger on a deal. There’s no harm in that. I think you should do what you think is best and if you don’t have enough of a down payment or you feel like you’re not the kind of person to be able to manage rental properties, then you just should not invest in rental properties.

If you feel that way, keep reading and I’ll outline ways you can get involved in real estate investing without having to be the “landlord” and have the headache of dealing with the logistics of having to manage properties.

Property management can take a lot of time, energy, and effort and it’s just not for everyone. I personally do not enjoy managing properties, so I outsource everything to people who specialize in it.

Here Are All the Ways You Can Get Started in Real Esate Without Any Money or Any Experience

#1. Become a Real Estate Agent

The easiest way to start dabbling in real estate with little or no money is to get licensed as a real estate agent. You can complete the licensing requirements in less than a couple of months, maybe even sooner if you worked hard. As a real estate agent, you will have the opportunity to evaluate deals before they come on the market.

If you get licensed as a real estate agent, you are also seen as a Real Estate Professional, and homeowners will reach out to you to ask you for advice as well as to list their homes.

As a real estate agent, you can work with homeowners to help them list their homes for rent, and you can help them find suitable tenants for their rental property. You can become a real estate agent without any money because there are brokerages who will pay you to get your license.

You might need to agree to hang your license with them, but that shouldn’t be a problem since they’re paying you for you to be able to get licensed.

If you spent 6-8 months working as an agent, you will gain a tremendous amount of experience which will prepare you for the next phase in real estate.

#2. Find A Mentor Who Works in Commercial Real Estate

If you’re not ready to get your real estate agent license yet, you can do a simple search online for “commercial real estate agent” or “commercial real estate investor” in your area, and look through the first 15-20 pages online. Make a list of all of the commercial real estate agents and investors in your area.

The best way to learn is to jump into the game, so if you’re willing to put in a little bit of work, you can email everyone on the list and tell them that you’re thinking about getting into real estate, specifically commercial real estate, and ask if they can meet you.

You just need to get one person to say yes. Once you get to know them better, offer to work for them as a volunteer for free. Tell them you will work for them for 3-6 months part-time and help them with anything in the business and you would be extremely grateful if they showed you the ropes. You never know, you might just find yourself a credit partner who can fund your next investment property.

#3. House Hacking: What Is House Hacking? And How Can You Make Money Doing It?

It’s basically a new word for an old idea: leveraging your home as a property owner to earn money. I like to call it “Mortgage Slashing”. This strategy is especially popular among young individuals who are trying to find inventive methods to pay for their first mortgage, but anybody can participate.

It’s quite a simple, but effective strategy to get into the real estate game, and live for free. At the very least, you can keep your mortgage payments very low. You can use this strategy on multiple properties, and some people have successfully used this technique to become quite successful in the real estate business.

The growing expense of housing, especially in metropolitan areas, has prompted this technique, which incorporates a variety of ways. One of my favorite methods to get into real estate investment is via “house hacking.” I recommend it to anyone who doesn’t want to spend a lot of money on rent but still wants to live in a big city. It simply means that you find a method to make money off of your house by renting it out.

My first choice would be a four-plex, which is a four-unit apartment building that is eligible for either FHA or conventional financing, and I would then rent out the other three apartments. Living in one and managing all three would be ideal for me. Another option is to purchase a single-family home with four to five bedrooms and then rent out the extra space to relatives and friends.

Owner-occupied properties tend to be maintained better over time, and this strategy works best if you plan to invest locally, maybe even on the same street as your four-plex building.

I’ve also heard of individuals renting out a second tiny house on their land, which helps them pay off their mortgage even quicker. Everything depends on your willingness and ability to put in the work necessary to turn a profit. Since you will be using the home as your primary residence, you will get an FHA loan, and the upfront money needed to close the deal would be extremely low. This is the advantage of purchasing residential real estate.

If you have no money at all, keep reading for other ways to get started in real estate. An FHA loan may be obtained for the purchase of your first main house provided you can put down a minimum of 3.5 percent of the purchase price.

If your partner or spouse is a veteran, they may be eligible for a VA loan, which requires no down payment. It is possible to include closing costs as part of the monthly mortgage payment with a VA loan. Depending on where you live, a USDA loan may also be an option. You will need to look into it.

You may find out whether the home you wish to buy is eligible for USDA financing by visiting the USDA eligibility page. If you want to use the property as your main residence, a conventional loan will need a down payment of at least 5%, making an FHA or USDA loan your best bet.

You may save 3.5 percent on your total out-of-pocket expenses if you get licensed as an agent. You could earn a commission of 2.5 percent. As you can see, with just a little ingenuity, it’s possible to get a deal done.

#4. Work as a Tenant Locator, Leasing Agent, or Property Manager

If you want to generate additional income, while also learning how to be a real property rockstar, you may want to explore working as a leasing agent.

As a leasing agent, your job is to assist a prospective renter in finding the right place to live. Often, you’ll be paid a charge of 50 to 100 percent of a month’s rent for your time.

For prospective landlords, this business model is ideal since it teaches you how to discover and screen renters, one of the most important aspects of the job. You’re doing it all while making money and taking a little risk of your own.

To work as a leasing agent, you’ll often be employed by a property management business. To help you find tenants for local landlords, I suggest you get started by getting licensed as an agent and contacting local landlords in your area.

Being a landlord was not something I looked forward to doing even from a distance. I’m not a fan of property management, so I enlist the help of skilled specialists to do it for me.

I’m sure you’d get a lot of calls from many successful real estate investors if you were able to sell yourself as the best tenant locator and property manager.

#5. Scouting

The easiest way to start your career in real estate with zero cash and no experience is to find existing real estate investors in your area and work as a scout for them.

All you need to do is have a local real estate attorney draft up a contract for you that you can use when you work with an investor.

Your job will be to find good deals for the investor, and when the real estate investor closes on the deal, you will get the fee that you have negotiated.

You don’t need much money or experience to get started. You can be living with your parents and get started as a scout. This will give you the experience you need to be able to tell a good deal from a not-so-good one.

In most cases, you’ll need to have your real estate license to legally earn finder’s fees as a scout. Instead of focusing on all buyers, you just focus on investor buyers. To expand your reach, you can also get your real estate agent license. I highly recommend it if you’re serious about this.

After you have gained experience and you can tell a good deal from a bad deal, you will have the confidence and know-how when it comes to finding your first real estate investment. And if you did a great job for the investors you were working with, you might be able to convince them to become your partner in the deal.

#6. Wholesaling

Real property wholesaling is a business approach in which a wholesaler gets into a contract on a property before selling it to a new buyer.

The wholesaler works as a middleman, selling the property to a new buyer or “assigning the contract” to the new buyer while pocketing the proceeds.

Wholesale real estate may be a good option for beginner investors and novice real estate professionals to get started in the real estate industry without spending a lot of money.

Continue reading to find out how real estate wholesaling works and whether it’s suited for you.

Real estate wholesaling is a profitable business enterprise in which a wholesaler puts the property under contract, and then assigns and sells the property to another buyer for a higher dollar amount.

The best part is that you don’t need a hard money loan, you don’t need to speak to a bank, you don’t need to worry about whether you have good credit, and you don’t need a down payment.

A contract is formed between the wholesaler and the seller, which the wholesaler then sells to another buyer

In most cases, the wholesaler does not make the actual purchase of the property. However, it is possible to close on the purchase of the property, and then re-sell it immediately. In most cases, the owner’s temporary contract allows them the right to sell it on their behalf while retaining the earnings.

The practice of obtaining highly discounted products and swiftly reselling them for a profit to other bargain seekers is known as wholesaling. In many circumstances, you may utilize very little money while still profiting from a wholesale trade.

Being a scout is not the same as being a wholesaler. You obtain the property under contract or purchase it before reselling it for a profit using wholesaling. As a scout, however, the investor you’re partnering with is the one who purchases the property. You will be paid after the investor closes the transaction.

You may also wholesale by partnering with an investor who provides you with the funds to purchase the property and then re-lists it on the market and sells it for a profit.

In this scenario, having your real estate license would be really beneficial. Because you will not be charged a commission.

After a few months or years of scouting and learning how to discover successful real estate transactions, you may transition into the wholesale sector. By then, you’ll have developed a lot of relationships in the real estate industry, and you could even have an investor prepared to put up the money to acquire these assets.

Wholesaling can be very profitable with the correct marketing plan. If you’re strong at sales and marketing, I believe that becoming a real estate agent is an easier and lower-risk method to start making money. You may then expand into wholesaling or incorporate it into your current agency company later on. The sky is the limit. These are amazing ways to get into real estate with no money, and if you’re willing to learn, you can be unstoppable.

#7. Do a Master Lease or Lease Option

You don’t have to purchase a home to begin investing in real estate

Instead, you may just rent under a master lease with an option to buy. The is one of the most powerful methods of profiting from real estate with little to no money down. In commercial real estate, master leases are commonplace.

Having a master lease gives you complete control of a property for the duration of the contract, which is typically one or two years. If you have spare rooms or apartments, you may rent them out to other renters.

You are effectively the owner of the property, and you may either rent it out to a renter or utilize it for your own company, depending on the kind of property.

An income-producing property may be leased as a “master lease” and then subleased to other tenants to generate rental revenue. Only one alternative is available: a master lease, in which the property owner will have no extra duties.

You will have “equitable title” to the property. According to the agreement, you may make changes and operate the property as you see fit, even while the owner retains legal ownership.

Renovating it, for example, might raise rates for the existing renters, who would benefit from the improved quality facility and you get to keep the profits. This is one of the easiest ways to invest in real estate.

On a 4-unit residential building, for example, you may secure the master lease for $4,500/month. You charge $1,500 per unit to rent out three units. In other words, you’re basically living for free. If you made improvements to the property and you were able to charge $1700 per month, you would not make a profit of $600 per month.

In addition to master leasing, you may be able to get what is referred to as an option to buy. For a defined amount of time, you have the right to purchase the property at a fixed price. This is one of the easiest methods to make money in real estate and potentially be able to acquire the property for a fixed price if you were able to secure the right deal. Everything is negotiable in a master lease.

With a master lease, you’re not worried about interest rates, a traditional mortgage loan, banks, or hard money lenders. If you can find the right property, and you’re comfortable with what the property owner charges in rent, you can proceed with the deal. There is a lot of upside to these types of real estate investments. It’s one of the best ways to jump into real estate for financially strapped investors.

Sometimes, you might need to offer a slightly higher rental fee to the property owner to be able to get the owner to agree to a master lease contract. Even with a slightly higher rental fee, it could be a good deal. Make sure you run the numbers and ensure that it’s a good deal.

#8. Seller Financing

Seller financing is a method of acquiring real estate in which the seller essentially acts as the bank. Rather than obtaining a loan from a bank, the seller allows you to pay for the property in monthly installment payments. 

This is one of the easiest ways to get started because you don’t have to go through the process of getting financing from a bank. You can structure the deal exactly the way you want to. 

While this does not usually occur, it is feasible to negotiate a reduced down payment with a seller. This is particularly true if the home requires renovations, since you may occasionally swap your sweat equity for a down payment instead of paying cash. 

Seller financing is perfect for properties that are owned free and clear by the seller. If the seller is a savvy investor, they will understand the benefits of selling their property to you with seller financing. It also depends on whether or not they are in need of the money and just want to cash out. 

There are several of these types of deals out there, and one easy way to look for deals like this is to either do a little bit of marketing to attract the right seller to you or reach out to sellers who haven’t been able to sell their property for some reason. You can find these properties online by doing a quick search.

#9. Subject To Financing

In this method, you can find a seller who needs to sell their property, but they have an existing mortgage on the property. The way it works is, you simply take over the payments for the mortgage and you can give the seller some cash to walk away from the deal. This could b $3K to $25K or more. It just depends on the deal.

I recently did a deal where the seller had refinanced the property multiple times over the time that they had owned the property. They owed almost how much the property was worth, so we did a deal where the seller walked away from the property for $12K, and I took over the payments.

After taking over the payments, I rented out the property, increase the net operating income, and refinanced the property with a much lower interest rate. I was able to pull my money out and then some. So, in essence, I was able to acquire the property with no money down. In this case, you could say that I got paid to take over the property.

#10. Partner Up

If you don’t have the money, you can still get started by using money from a partner.

While there are many ways to partner, one of the simplest is something called a credit partnership. If you are already scouting for deals for an investor in your area, it will be easy to form a credit partnership.

Your investor or credit partner will fund the deal, and you will lease the property from them with an option to purchase the property at a higher price.

You can find a suitable tenant for the property, collect the rent, and manage the property. This will help you generate positive cash flow.

You have two choices at this point. You can save up enough money to buy the property and exercise the option to buy before the expiration. If you have put in some sweat equity and increased the value of the property, it will appraise for more than the cost of acquisition. This means you get to keep some cash in your pocket and use it for your next deal.

If you decide you don’t want to purchase the property, you can find another buyer who would be willing to purchase the property.

Conclusion

Real estate investment refers to the acquisition, ownership, management, rental, and/or sale of any sort of real property for profit. It is unquestionably an excellent option since real estate provides a unique mix of safety, consistent income flow, and a high likelihood of financial gains. It can be a secure investment.

As the value of a property rises over time, a well-planned and executed real estate investment strategy can produce passive income. This can be a good long-term investment when the value of a property rises slowly over time.

You can get started with little to no money, and going to a bank for a loan is not the only way to buy property, as you can see from the strategies I have outlined above.

You may even include it in your overall wealth-creation plan.

If you’re new to real estate investing, it’s vital to read excellent real estate books and learn from experienced investors who have earned millions by investing in some of the top real estate markets in the nation.

The passive income you can generate from real estate takes work, but once you control the property, you can almost rent it out instantaneously. 

The process of managing a rental property does have a learning curve, so it’s a good idea to discuss the specifics with a real estate professional. Preferably someone who can guide you to make sure you’re doing all the right things with your first rental.

I hope this post was valuable to you. If you have any questions or comments, feel free to reach out below or send me an email.