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Real estate annual returns at 10.6% are a solid and sensible choice to focus on, but the first step is the hurdle of payment requirements.

So the question is, how do you invest in real estate with no money?

Don’t worry; we’ve got you covered.

Below is a list of creative strategies we’ve compiled from reputable real estate sources. Use these strategies to invest in real estate with little or no money down.

Buckle up and get those real estate juices flowing!

1. Turn Your Primary Residence Into a Rental Property

Did you know if you’ve lived in your primary residence for longer than a year, you can turn it into a rental property?

This means you’d only be required to make a down payment of 1%–15% of your home’s purchase price using an FHA loan instead of a conventional loan, which typically requires a 15–25% down payment.

It’s best to state your intentions of turning your primary residence into a rental to your lender or financial institution to avoid fraud or misdeclaration. 

If you plan on living at your primary residence for a few years, you shouldn’t have any issues.

In the real estate world, we call this house-hacking, and it’s a great strategy for new investors.

2. Seller Refinancing 

Seller refinancing is when the property owner funds the buyer or investor.

Think of it this way: The seller acts as the bank to help you make the purchase, and you repay the loan over time according to the agreed interest rate and repayment schedule.

Why would you use this type of financing?

Well, if you can’t get a loan from a bank or another financial institution, this type of financing becomes lucrative, although it may carry a higher interest rate.

The problem with this type of financing is that it’s not easy to find.


Most property owners can extend this type of financing if they’ve paid their entire mortgage.

Technically, a property owner could extend seller financing, but the bank reserves the right to foreclose this property or demand that the entire mortgage be paid in full.

This is because of the due-on-sale clause.

Although seller financing can be tricky, it’s a great option if you can’t get an FHA or conventional loan.

3. Lease Option 

A lease option is an agreement between you and the property owner where the owner gives you the opportunity to purchase the property for an agreed price within 5–10 years.

This option ties up the property owner so that they cannot offer or sell the property to anyone else while you are the tenant.

In this scenario, you’re both a tenant and a buyer of the property, but you pay higher rent.

So why pay higher rent and not purchase a property directly?

In a perfect world, everyone would get approved for a mortgage loan.

The problem is we don’t live in a perfect world, and if you don’t qualify for a mortgage loan, a lease-to-own option may be ideal while you boost your credit score.

Paying higher rent isn’t all bad news because this payment includes the actual rent and an excess portion that goes toward the property’s purchase price. 

Before signing any agreements, make sure you understand the fees and the purchase price.

4. Hard Money Lenders 

Hard money lenders are private lenders from groups or individuals that will lend you money for the property you want to secure at a higher interest rate. 

If you’re looking to finance your investment properties with this option, make sure the numbers make sense.

In other words, if the amount you’ll profit from your purchase or monthly rent doesn’t justify the high interest rate offered by a hard money lender, don’t do it!

Hard money lenders work by using the point system of 3–5 points as the upfront percentage fee on the borrowed amount.

Added to this is the 6–18% interest rate charged compared to traditional financial institutions.

The trade-off in hard money lending is that the average 10% interest rate is added to the upfront 2-point percentage fee of the loan. 

It can still work to your advantage if you find a distressed property with potential and the right lender. 

On the upside, hard money lenders have fewer requirements and procedures, so you can acquire funding faster than by using banks.

There is also a better chance of getting your loan with risky projects than with a traditional bank.

But there’s a catch: Hard money lenders usually offer you only 12 months or fewer to repay the loan.

5. Microloans 

Unlike conventional loans, microloans are smaller.

The good news is that because they’re a small loan amount, there are fewer requirements.

A typical microloan worth $10,000–$35,000 has a corresponding interest rate depending on the risk level. 

You still have to go through due diligence to review company financials, personal financials, business plans, tax information, and credit scores. 

A microloan lender will work with you to assist you in creating a realistic repayment scheme.

Be ready with the following when you show up for the interview:

  • A good credit score (680 or below will not pass for a loan)
  • A clear picture of your background, including your resume, industry experience, and educational background
  • Your business experience and track record of success and growth potential in your business
  • A coherent business plan to show your organization, projections, and plans for the company
  • The financial history of credit lines, loans, balance sheets, and tax returns to show you have a financially healthy business

6. Partnerships 

Real estate partnerships are for those who do not have enough capital or means to take out a loan.

What the other lacks, the other one will make up.

One partner can spot a good deal on a distressed property at a discounted price. The other partner with a good credit score and working capital can work to finance it.

An equity partner is a person who will help finance the property either through capital infusion or by securing a loan.

The terms of the agreement, payment plans, and length of the partnership are created by you and your equity partner.

It’s best to straighten out the risks, returns, goals, and roles of each partner to make things work smoothly.  

So where can you find a real estate partner?

Typically, family members, friends, or colleagues are a great place to start.

But formal partnerships entered through a joint venture (JV) with respective percentages on the equity, income, and value appreciation are an alternative option.

7. Loans

Different loans are available in the market.

By studying what will work for you and completing your documentation, you can save funds by using a home equity loan, SBA loan, USDA loan, FHA loan, or the Good Neighbor Next Door Program.

Home Equity Loans 

Home equity loans work well for your second real estate investment. They allow you to take out a loan against your property’s equity.

For example, if your property is worth $250,000 and you owe $150,000, you’d have $100,000 in equity. You’d then divide your equity amount by the purchase price and subtract your lender’s loan-to-value ratio (80%).

Property worth amount – loan amount = equity

Equity / property worth amount = loan-to-value-ratio

(Loan-to-value-ratio – lender loan-to-value) ratio * property worth amount = home equity loan amount

Doing the math for the example above, you’d get $82,500.

SBA Loans 

Small Business Administration (SBA) loans are extended to small businesses looking to invest in commercial real estate with a 10% down payment on the property.

By availing themselves of the US Small Business Administration’s CDC/504 loan program, small businesses can receive a loan to buy a building or finance improvements or construction on a property.

It is a community-based partnership to promote development within the community. 

USDA Loans 

US Department of Agriculture (USDA) loans are extended to low or moderate-income individuals or families.

Areas where the population is 10,000 or less qualify for these loans.

USDA Rural Development approves mortgages for area listings at with a 0% down payment for rural or suburban homebuyers.

FHA Loans 

The Federal Housing Administration (FHA) loan is extended to first-time home buyers with a low to moderate income.

This entails a low down payment of 3.5% and borrowing 96.5% of the property’s value. Work on achieving a decent credit score to to get approved for the loan.

GNND Program

The Good Neighbor Next Door (GNND) Program supports public servants looking to own a home, which strengthens communities.

Law enforcement officers, firefighters, medical technicians, and pre-kindergarten to grade 12 teachers can buy property in revitalization areas. They get a 50% discount on the purchase price and a down payment of $100 under the FHA-insured mortgage. 

8. Wholesaling 

Wholesaling is spotting a discounted or distressed property and matching an investor to buy the contract price you negotiate with the property owner. 

The reselling part is where you make a profit as a bargain hunter in real estate.

You need to secure the property under contract and resell it with a padded amount that the buyer knows is your fee.

Wholesaling is hard work that starts with looking for motivated sellers of distressed properties. It involves cold calls, direct mail, and knocking on strangers’ doors. 

When you have the property owner’s attention, convince them to agree to a price that is lower than the market value and enter a contract agreement for some time until you have an investor to buy the property. 

It is a sales business where you have to make many offers to different investors and get turned down or rejected a lot. 

Wholesaling works best if you start as a real estate agent and establish a client investor base you can call on to consider the offer. 

Your prospective investor has to trust your investment offer, and the only way you can do this is to establish a credible relationship.

The property owner and the investor know you are in between and earn by padding your commission fee on top of the contract price.

Wholesaling sounds enticing for most people looking to break into real estate investing, but the truth is that it’s far from easy. However, if you master the art of finding great deals, you’ll be able to make money on the side and be prepared for when you have to find great deals for yourself.

9. House Hacking 

House hacking is when you rent out your primary residence for an amount of time.

For example, if you have a duplex, triplex, or four-plex, you can rent out the other units while it is vacant. House hacking will help you pay down your mortgage or enable you to save to invest in another property.

In single-family homes, you can rent out a room or convert the basement into another living area. 

Some buyers will opt to invest in duplex, triplex, or four-plex houses where a rental is used for the unused units while you live in the other unit as a primary residence. 

The idea is to monetize a vacant house, room, or space and derive extra income every month while paying down your mortgage. 

House hacking is a long-term plan to make money and use the funds to live free of mortgage. It is a means to reinvest in another property that will turn into more rental income.

You can take advantage of loan programs with low down payments because it is your primary residence.

  • 0% downpayment for low to moderate-income individuals through the USDA loan
  • 0% down payment for veterans through the VA loan
  • 3.5% down payment for low to moderate-income individuals through the FHA loan
  • 3–10% down payment with mortgage insurance for individuals with good credit standing through conventional loans

10. Find Tenants for Rental Owners 

You can start your real estate career by finding tenants for an experienced investor or rental owner. 

This is how I got started, and it was a rewarding experience. You’ll need to find great tenants for your real estate investments, so why not get good at doing this?

If you plan to hire a property manager, knowing how to find good tenants will help you find good property management companies.

This can start as a side hustle and turn into a full-time career or business, and it is helpful for many reasons:

  • Learning about various aspects of real estate transactions
  • Getting a good grasp on the real estate market and what properties are available for rental
  • Networking with other real estate agents who will be your potential real estate associates
  • Learning how to interview and screen tenants before suggesting an ideal space for them

Your job is to interview a screened applicant and then match the tenant with the business’s correct rental unit. If you are successful with the rental deal, you will earn a fee between 50 and 100% of a month’s rent.

Creative Ways to Invest in Real Estate With No Money

1. Get a Side Hustle to Increase Your Income

A side hustle is any business that you spend time and effort doing on top of your regular job.

Be prepared to stretch your hours after work and choose a side hustle that works best for your schedule and personality.

You can monetize your property by renting a guest room on Airbnb or renting your empty garage space on the Neighbor app.

If you have a car, you can carshare during the hours you are at work, allow your vehicle to carry a brand under Carvertise, or be an Uber driver after office hours and on the weekends.  

You can also do shopping errands with Postmates or Doordash or use a gained skill with TaskRabbit.

Another easy option is to work from home as a freelancer on Upwork or Fiverr using various skills.

2. Crowdfunding 

Crowdfunding is a new investment tool in real estate financing that uses small amounts of capital from a common fund to finance a real estate project or act as a hard money lender. 

The fund comes from different investors who put their money together to finance a new project.  

Crowdfunding is a practical option for a beginner real estate investor. For as low as $1,000, you can invest in different real estate projects listed on selected social media and crowdfunding websites. 

This arrangement puts together small investors with entrepreneurs who have new projects but lack funding.

Instead of letting your money sit in the bank, you can choose a start-up business or new project being offered and invest in it. 

When using regulated SEC equity-based crowdfunding ventures in the US, crowdfunding sites get a percentage of the funds. In return, crowdfunding gives you two options for your return on investment:

  • The funds are released after the project campaign kicks off. Your ROI profit is pro-rata or when they reach the target projections of the project.
  • The funds are released after the campaign has reached its funding goal.  

Crowdfunding sites actively use social media outlets like Facebook, Twitter, and LinkedIn to reach potential investors who want to invest small amounts. 

The investors become shareholders of a real estate property, similar to equity investing.

Without buying actual property, you can collect dividends from the rental earnings of your property investment.

3. Flip Houses

Flipping properties is one of the best ways to start your real estate business.

You can start with your primary residence using loans with low down payments from the USDA, FHA, or VA or negotiated conventional loans.

While you pay your mortgage, start making improvements to add value to your house and be ready to sell within the next five years.

The live-in flip gives you the advantage of profitable tax laws in the US.  

You are exempted from paying taxes if the amount is $250,000 as an individual or $500,000 as a couple who files taxes jointly.

Additionally, flipping properties provides a quick turnaround on your investment and avoids the hassle of dealing with tenants to maintain a property.

Here are some ways to flip properties:

  • Purchase a house that is in financial distress or below the current market value.
  • Purchase a fixer-upper property and improve the house’s design and structure to create value. 

4. BRRRR Strategy 

The Buy, Remodel, Rent, Refinance, Repeat (BRRRR) strategy is similar to flipping properties.

Finding distressed properties is key for this strategy to work.

To implement BRRRR, you’ll renovate a distressed property to increase its market value with the intention of refinancing once you’re done renovating.

Figure out your financing options by looking at home equity lines of credit (HELOC) or hard money loans.

When done right, the BRRRR strategy will allow you to renovate a property without using your money.

5. REITs 

Real estate investment trusts (REITs) are like mutual funds for property.

A stock in a REIT gives you ownership of small pieces of various properties that earn income. 

Investors can buy shares in real estate portfolios that earn rental income without buying into a commercial property. 

Original properties that make up the REIT portfolio are offices, hotels, medical offices, retail areas, and warehouses. The income from rentals is where the revenue of your investment will come from. 

A team manager supervises the investments in commercial, industrial, or residential rental properties for a fee.

Shares under REITs are sold if you need to raise cash like stocks. The REIT shares are publicly traded and registered under the SEC. 

Before investing in a REIT, the company should be financially sound for you to earn dividends from real estate earnings. 

REITs can also buy or finance a new property, handle property management, and advance loans to property developers or owners. Publicly traded REITs are purchased through a broker by common stock, preferred stock, and debt security.

Best Books to Invest in Real Estate with No Money Down 

1. The Book on Investing in Real Estate with No (and Low) Money Down by Brandon Turner

The Book on Real Estate with No (and Low) Money Down was written by Brandon Turner. He is the co-host of the BiggerPockets podcast and an active real estate investor.

This book teaches strategies for leveraging other people’s money using multiple financial methods used in the real estate markets. You will learn investment strategies in real estate with how to get started in investing.

The book discusses how to invest with little to no money, creative investing, and attracting private money, hard money lenders, and equity partners. It details the differences between rentals, flipping, wholesaling, and many more investment ideas for real estate.

It then talks about the ugly side of creative investing with some downsides to the strategies and tips to overcome the problems you face. 

2. The Richest Man in Babylon by George S. Clason 

The Richest Man in Babylon, written by George S. Clason, is a classic book on personal wealth and what a person desires and wishes to accomplish. 

It is a collection of inspirational Babylonian parables to guide you to the path of prosperity and its joys. 

With language similar to the Bible, it is a modern-day classic that understands human tendencies and solutions to personal financial problems.  

This best-selling book is a collection of inspirational works that deal with thriftiness, financial planning, and personal wealth. It shares the secrets of keeping your money and making more of it. 

These ideas can be life-changing since wealth and dreams of grandeur are not something you dwell on. It talks about money and freedom with simple day-to-day examples.

3. The Compound Effect by Darren Hardy 

The Compound Effect is written by Darren Hardy, a publisher of Success Magazine. The book talks about the core principle that decisions shape your destiny. 

Every little thing you do and every decision you make will either take you to the life you desire or take you to disaster. If your goal is to live an extraordinary life, you can apply the power of The Compound Effect and create success.

The book is filled with fundamental principles that teach business success, relationships, and other life matters. 

The practical step-by-step guide teaches you to multiply your success and monitor or chart your progress to bring you closer to achieving your goal. It emphasizes the need to work hard daily to make the compound effect benefit you.  

4. How to Invest in Real Estate: The Ultimate Beginner’s Guide to Getting Started by Joshua Dorkin and Brandon Turner

How to Invest in Real Estate: The Ultimate Guide in Getting Started was written by co-authors Joshua Dorkin and Brandon Turner, the long-time hosts of The BiggerPockets podcast and active real estate investors in their own right. 

The book pushes the reader to move and start pursuing real estate investment instead of just dreaming, thinking, and talking about it. It points out that investing in real estate is a powerful way to achieve true financial freedom.

The book also talks about different niches and strategies that exist in the world of real estate investments. It has a dozen life-changing pointers and forty life stories of people who found success in today’s economy. 

It is a manual that teaches you how to invest in the eight unique property types available on the market while juggling a full-time job. 

5. The Millionaire Real Estate Investor by Gary Keller, Jay Papasan, Dave Jenks 

The Millionaire Real Estate Investor was written by Gary Keller, Jay Papasan, and Dave Jenks. It is a collection of the personal testimonies of 120 millionaire real estate investors.  

They discuss how it is not only money that they invested in but also their time and effort in building their financial wealth.

The how-to guide shows you the models and strategies for real estate investing and identifying real estate opportunities. 

With perseverance and patience, these millionaires shared how they handled every challenge. In doing this, they adopted the mindset of a millionaire. The book is both a leadership and training handbook for people who want to build wealth but are held back from pursuing the dream of financial freedom.

It negates myths about money and investing and pushes the reader to adopt a millionaire mindset. 

Investing in Real Estate With No Money Is Not Impossible 

While investing in real estate with no money is possible, it requires a lot of creativity and patience.

Holding back from unnecessary spending and building a side hustle is the first step to becoming a successful real estate investor.

Remember, nothing in life worth doing is ever easy.

You now know some of the real estate basics and have a list of real estate investing books to read. Now go make your first real estate investment!


Can I invest in Real Estate for $1,000? 

With many creative financing strategies available, your $1,000 can go a long way in real estate investment. 

You can put your money in a REIT or crowdfunding as a passive investor and choose properties to invest in.

You can also take an active role and start as a bird dog or spotter for a candidate property, but you would need to study and get licensed, and you would earn back your finder’s fee.

Can I invest in Real Estate with a bad credit score? 

You can circumvent bad credit and invest in real estate through short-term financing.

You can explore hard loans that have a higher interest rate because of the risk on your investment. 

There is also creative financing with sellers or private individuals. They are lenient with your credit history and will focus on your monthly payments and the loan term.

How Do Beginners Invest in Real Estate? 

Start with baby steps and study the whole new business of real estate.

Read real estate investing books to familiarize yourself with real estate lingo and trade practices. 

Then, take action.

Big or small, you need to take action if you ever hope to be a successful real estate investor.

Let all your friends and family know you’re looking to be a real estate investor and are willing to help them with real estate-related tasks.

If you want a passive role, there are REITs or crowdfunding projects where you can invest your money. 

Finally, you’ll need cash to be a real estate investor.

Save, save, and save some more.

You’ll need a 5–20% down payment for the property you plan to purchase, so work backward from your local real estate market prices.


Chris founded FWO, the ultimate destination for those looking to achieve financial independence, explore the world and stay motivated daily.

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