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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 to hurdle the payment requirements. 

So 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 no money or little 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 put a downpayment of 1%-15% of your home’s purchase price using an FHA loan, versus a conventional loan that typically requires a 15-25% downpayment.

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 in your primary residence for a few years you shouldn’t have an issue.

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 holds financing for 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 ever use this type of financing?

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

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


Because most property owners would only be able to extend this type of financing if they’ve paid the entire mortgage.

Technically, a property owner could extend seller financing, but the Bank reserves the right to foreclose this property or demand the entire mortgage to 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 from offering the property for sale to anyone else while you are the tenant.      

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

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

Before you sign any agreements make sure you understand your 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 the average 10% interest rate is added to the 2 points upfront 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 get hold of your funding faster than 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 up to 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 the company financials, personal financials, business plans, tax information, and credit scores. 

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

Be ready with the following information when you show up for the interview.

  • Work to reach a good credit score because 680 or below will not pass for a loan.
  • Prepare a clear picture of your background, including your resume, industry experience, and educational background.
  • Prepare your business experience and track record of successes and growth potential in your business.
  • Set a coherent business plan to show your organization, projections, and plans for the company. 
  • Prepare 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 with 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 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 availing of a home equity loan, SBA Loan, USDA Loan, FHA Loan, or Good Neighbor Next Door Program.  

Home Equity Loans 

Home Equity Loans work well for your second real estate investment.

A home equity loan allows you to get a loan amount 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 your 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 

SBA loans are extended to small businesses looking to invest in commercial real estate with a 10% downpayment for the property.

By availing of the CDC/504 loan program from the U.S. Small business Administration, the loan is given 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 

USDA loans are extended to low or moderate-income individuals or families.

The areas that qualify are under-popularized zones where the population is 10,000 or less.

The US Dept. of Agriculture Rural Development approves mortgages for area listing under the listing of with a 0% downpayment for rural or suburban homebuyers.   

FHA Loans 

The Federal Housing Administration loan is extended to low-to-moderate-income borrowers who will buy a first-time home.

low 3.5% downpayment and borrowing 96.5% of the value of a property. Work on a fair credit score if you want to get approved for the loan.   

GNND Program

The Good Neighbor Next Door Program allows public servants to own a home to strengthen 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 downpayment 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 negotiated 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 the doors of a stranger. 

When you have the property owner’s attention, convince the seller 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 but get turned down or rejected a lot. 

Wholesaling will work if you have started as a real estate agent and established a client investor base you can call on for them 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 through real estate investing, but the truth is 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 some time.

For example, If you have a property that is 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.  

For single-family homes, you 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 per month from paying for 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 another rental income. 

You can avail of loan programs with a low downpayment because it is your primary residence.

  • 0% downpayment for low to moderate-income individuals through the USDA loan
  • 0% downpayment for veterans through the VA Loan
  • 3.5% downpayment for low to moderate-income individuals through the FHA loan
  • 3-10% downpayment with mortgage insurance for individuals with good credit standing through the 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?

And if you plan to hire a property manager to manage your properties, knowing how to find good tenants will help you find good property management companies.

This side hustle can turn into a full-time career or business and is helpful for many reasons.

  • Learn about the ins and outs of real estate transactions.
  • Get a good grasp of the real estate market and what properties are available for rental.
  • Network with other real estate agents who will be your potential real estate associates.
  • Learn 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 earn a fee between 50-100% of a month’s rent.   

Creative Ways to Invest in Real Estate With No Money

1. Get a Side Hustle to Increase Your Income

side hustle is any side business that you spend your 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 for Air Bnb or your empty garage space with 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 under Posrtmates or Doordash or use a gained skill under TaskRabbit.   

Another easy option is to work from home as a freelancer on Upwork or Fiverr with 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 and finance a new project.  

Crowdfunding is a practical and doable option for a starting 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 parking your money in the bank, you can choose what start-up business or a new project is being offered and place money as an investor. 

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

  • 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.
  • Released Funds 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 in 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 low downpayment loans from USDA, FHA, 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 the profitable tax laws in the US.  

You are exempted from paying taxes if the amount is $250,00 as an individual or $500,000 as a couple who files taxes jointly.  

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

Here are some ways to flip properties:

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

4. BRRR Strategy 

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

Finding distressed properties is key for this strategy to work.

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

Figure out your financing options by looking at your options such as Home Equity Lines of Credit (HELOC) or getting a Hard Money Loan.  

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

5. REITs 

Real Estate Investment Trusts (REITs) are like mutual funds but in property terms.

A stock in REIT gives you ownership of a small piece of various properties that earns 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 REIT 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. 

REIT also buys or finances new property, handles property management, and advances 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 an active investor in real estate and co-host of The BiggerPockets Podcast. 

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 Babylonian parables that are inspirational works 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 secrets of keeping your money but making more of it. 

The 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, every decision you make, will either take you to the life you desire or take you to disaster by default. If you want to live an extraordinary life, you 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 written by co-authors Joshua Dorkin and Brandon Turner are 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 doing it instead of just dreaming, thinking, and talking about real estate investment. It points out that real estate investing 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 during today’s economy. 

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

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 personal testimonies of 120 millionaire real estate investors.  

They discuss 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. Doing this, they adopted a mindset of a millionaire. The book is both a leadership and training handbook for people who want to build wealth but holds people back from pursuing the dream of financial freedom.  

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

Investing in Real Estate With No Money Is Not Impossible 

Investing in real estate with no money is possible, but it will require a lot of creativity and patience.

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

Remember, anything in life worth doing is never 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? 

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

You can put your money in REIT or Crowdfunding as a passive investor and choose the 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 earn back your finder’s fee.

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

It is possible to invest in real estate if you currently have bad credit by doing 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 any real estate-related tasks.

If you want a passive role, there is REIT or Crowdfunding where you” 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% downpayment for the property you can plan to purchase, so work backward from the real estate market prices local to your area.


Chris is the founder of FWO, the blog for people looking to reach financial independence and stay inspired along the way.

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