How to Invest in Real Estate with Little (or No) Money (2024)

Summary: In this article, we’ll explain how to invest in real estate with little or no money. Topics include five tips for how to invest in real estate with little money, 10 tips for how to invest in real estate with no money, an investor’s success story where you’ll learn how he started investing in real estate with no money.


How are you planning to invest in real estate with little or no money? Sounds like the type of question my parents would ask me, a logical one. Well mom and dad, I’m here to explain exactly how to invest in real estate with little or no money and do it successfully.

How To Invest in Real Estate with Little Money: 5 Tips

How to Invest in Real Estate with Little (or No) Money (1)

Interested in buying real estate buy don’t have a lot of money? Don’t worry! Here are five tips for how to start investing in real estate with little money.

Tip #1: Buy a Duplex

Buying a duplex is a great way to start investing without a lot of money. Perhaps the best part of owning a duplex is the benefit of having someone else pay your mortgage.

Assuming you find a good duplex in a growing market, it’s possible to live rent free, while building equity in an appreciating asset using someone else’s (your tenant) money! After living in the duplex for a few years, you can leverage the property’s equity and use it as the down payment for your next investment property.

You can keep the duplex and rent out both sides to cover that mortgage and possibly part of your new property’s mortgage at the same time. And boom! You are successfully executing a real estate buy-and-hold strategy, using just a small amount of your own money.

Tip #2: Buy a Home as a Primary Residence

With a VA or USDA loan, you can buy a home with zero down. One of the terms of these loans is for the homeowner to live in the residence for a minimum of one year. You can then choose to move out and rent out the property. When you buy a home, even as a primary residence, you are investing in real estate because it is building equity.

Tip #3: Look Into Government Loans

Possibly the most well-known source of financing available to real estate investors are government-funded loans. The following is a list of government loans:

  • FHA Loan
  • USDA Loan
  • VA Loan
  • Fannie Mae or Freddie Mac
  • Good Neighbor Next Door Program
  • Energy-Efficient Mortgage (EEM)
  • FHA Section 203(k)
  • Native American Direct Loan
  • Local Grants and Programs

Keep in mind that some government loans can take several months to get approval. Make sure you look into qualification guidelines.

Tip #4: Ask the Seller to Pay For Closing Costs

Motivated sellers are often willing to pay for buyer closing costs to sweeten the deal. The downside is that unless you offer close to or full asking price, the seller will be less inclined to cover those costs. Having said that, it never hurts to ask.

Tip #5: Use a Lender Who Pays for Closing Costs or Offers a Down Payment Rebate

A great alternative to asking the seller to pay for your closing costs is to use a lender who is willing to cover these costs. Quicken Loans and Freddie Mac’s Home Possible Advantage program is offered a 1% down payment option on single-family, owner-occupied properties. You put down 1% and Quicken Loans pays the other 2%.

Please note: There is a minimum credit score and debt-to-income ratio requirement in order to qualify for the above loan.

How to Invest in Real Estate with No Money: 10 Tips

How to Invest in Real Estate with Little (or No) Money (2)

Interested in real estate but don’t have any money to invest? Look no further. In the following sections, I’ll share 10 tips for how to start investing in real estate with no money at all.

Tip #1: Use Retirement Funds to Buy Investment Property

Did you know that the IRS allows you to invest in real estate using your retirement accounts? Assuming the guidelines set for by the IRS are met, a self-directed IRA or 401k can be used to purchase real estate. In fact, many of our RealWealth members own property in their retirement funds.

The process isn’t as complicated as it may sound. You can quickly build your retirement savings through rental income and profits. And even better, it’s all tax-deferred.

Tip #2: Look into Seller-Financing

Another way to invest in real estate with no money is through an investment strategy called, “seller-financing.” This type of financing is pretty simple and has been around for awhile. How it works is that the seller of the property provides financing to the buyer. Rather than a buyer getting a note and mortgage from a conventional bank, the home-seller creates the note based on an agreed-upon interest rate and length of time. Seller-financing can have some big advantages for both parties.

Some advantages of seller-financing include:

  • The seller can sell his or her home quickly to a willing buyer
  • The purchase price may be at market value or even higher – within reason
  • The seller receives payment for the sale of the home in monthly income payments vs all at once, which has tax benefits.
  • The buyer gets to purchase a house with “creative” terms that a bank might not allow. For example, the down payment may be lower or in some cases, even nonexistent, and debt levels and credit standards may also be lower
  • The buyer doesn’t have to get an appraisal to get the loan, but pays what he or she thinks the property is worth
  • The buyer owns the home – either right away or once the note is paid – depending on how the note is set up.
  • It’s important to note that seller financing is completely legal when done correctly. The seller is simply choosing to make a private loan to a buyer so that they can purchase a property, using that property as collateral just as a bank would.

For more information on how to do seller-financing and common pitfalls to avoid, check out our article and podcast, Seller-Financing “Deals” Under Scrutiny.

Tip #3: Get a Home Equity Line of Credit or HELOC

It’s always great when you are able to build equity in your home. But having a large amount of money in one place presents some risk. What if something happens to the property and it loses a ton of value? Thus, cutting your equity.

To better protect yourself and your assets, investors should diversify. You can get extremely low interest rates if you borrow money against your primary residence. With interest rates around 4 percent, you’ll be able to find safe real estate investments producing two to three times that amount. Rather than letting equity just sit there, it’s now earning money for you in another property.

Tip #4: Get a Private Loan

One of the popular ways to buy real estate with no money down is to get a private loan. The interest rates on private loans can range anywhere from six to 12 percent of the borrowed amount.

Private loans are not financed by banks. Instead they are funded by individuals and businesses looking to finance investments for a return of their own. A good rule of thumb when getting a private loan is to find properties that you can buy for 50 cents on the dollar.

Tip #5: Consider a Hard Money Loan

If you don’t have the money or credit score to get traditional financing to purchase a property, a hard money loan may be an option to consider. Hard money lenders set fees in the form of points. These points, ranging from three to five, mean an additional, upfront fee based on a percentage of how much you borrow. These points are in addition to the interest rate charged by the lender, usually ranging between 10 to 18 percent.

The cost of hard money loans may seem steep, especially compared to conventional mortgage rates. However, it may be a good option if you don’t have much capital, can’t get traditional financing and still want to start investing in real estate.

Tip#6: Try a Wholesaling Strategy

The most popular wholesaling strategy, where you won’t pay any money out-of-pocket, is called “Assignments.”By using this strategy you are essentially selling the “rights” of the contract to the investor who is buying the property.

Here’s how it works…

Step 1: Find a property owner looking to sell. Let’s say they want to sell their property for $60,000.

Step 2: Find an investor and sell them the rights to the contract for a set fee.

Let’s assume your “rights” fee is 20% of the price of the property, which is $12,000.

Using this strategy, you are basically getting paid to connect sellers to buyers and buyers to sellers.

Because it’s possible to have a lot of gray areas with wholesaling, it’s a good idea to consult with a real estate attorney to avoid any legal repercussions.

Tip #7: Network for Joint-Venture (Equity) Opportunities

Most real estate joint ventures involve two parties: the operating member and the capital member. The operating member is typically responsible for the management and daily operations of the project. The capital member is responsible for financing most or even all of the real estate project.

Both members of the joint-venture are liable for losses and profits relating to the real estate investment.

Tip #8: Setup a Lease-Option to Buy

This real estate investing strategy allows investors to buy properties without immediately taking legal ownership. The investor will instead sign a legal “option to buy” from the homeowner at a set price in the future.

The investor agrees to rent out the property long-term with an agreement to buy the property at a set price on a specified date in the future. This can be a mutually beneficial agreement and a great way to invest in real estate with no money, by renting now with the intention to buy later.

Tip #9: Become a House Hacker

Living in a home that simultaneously produces income is a real estate investing strategy known as “House Hacking.” These types of properties include:

  • Multi-family homes (I.e. a duplex, triplex, or fourplex)
  • Extra rentable space (I.e. a basem*nt, spare bedrooms or guest house)

Probably the best immediate benefit to house hacking is that it helps pay for your housing costs. Your tenant(s) basically pay for part of your mortgage.

Tip #10: Check Out Peer-to-Peer Lending or Micro Loans

Peer-to-Peer (P2P) Lending has changed the way people are doing business. Microloans are small loans issued by individuals rather than banks or credit unions. The loans are funded and issued by one individual or a number of individuals.

The people who typically use microloans have lower credit scores, thus increasing the risk of default. Because of this, interest rates on microloans are often high. But if you need to borrow a smaller amount to fund your property investment, this could be a good option.

Success Story: How Shane Started Investing in Real Estate with No Money

On a recent episode of the Real Wealth Show podcast, host, Kathy Fettke, interviewed 30-year-old real estate investor Shane Adams. Three months ago, he took the big leap from his full-time job and is now a full-time real estate investor and the owner of Shane Adams Real Estate. He has six flips and seven doors under his belt, and is looking to do a lot more.

Here’s his advice and how he did it.

With a growing interest in real estate investing, Shane started doing research online along with reading books by experts. His first property was a flip, which took took 7 months, much longer than expected.

After receiving a $25,000 inheritance from a family member, Adams decided to invest in real estate. The purchase of the property was financed through a joint-venture where Adams put up $25,000 and the capital member matched it. He then got a private lender to finance the rest.

The flip turned out to be an overall success and Adams saw a positive return on his investment after selling the property. Although, he stated, not without its headaches and unexpected costs.

Shane’s real estate investing book recommendations…

  • Mike Butler, Landlording on Autopilot
  • Mike Michalowicz, Profit First

5 Tips from Shane Adams on How to Invest in Real Estate with Little Money

Tip #1: Cheap labor isn’t skilled. Skilled labor isn’t cheap. It’s worth the money to hire a professional contractor. It will help keep your project on schedule and save you a lot of time and headache.

Tip #2: You’ll have success if you hire a good property management team, and setg up systems that allow your property to run like a well-oiled machine.

Tip #3: Buy properties that are already renovated so that you know the upfront costs and what to expect. That way you’re not spending thousands of dollars on replacing big ticket items, like a roof, HVAC or other big ticket items.

Tip #4: Check out wholesaling.

Tip #5: It’s all about the market you’re choosing to invest in. Are people moving there? Are there jobs available? Is the population growing? Are companies moving there? Etc. Make sure you’re investing in a growing market.

Listen to Shane’s episode here.


By now, you should have some great ideas for how to invest in real estate with little or no money. The point I want to leave you with is that the opportunity to invest in real estate isn’t only available to the wealthy. Even if you have no money in savings or very little, there are still ways you can start investing in real estate using the assets you have and creative financing or buying strategies.

To learn more about real estate investing strategies, check out our Top 3 Best Real Estate Investing Strategies by Category.


I'm an experienced real estate enthusiast with in-depth knowledge of various investment strategies. I've successfully navigated the world of real estate investments and have a thorough understanding of the concepts discussed in the provided article.

Investing in Real Estate with Little Money: 5 Tips

  1. Buy a Duplex: This strategy involves purchasing a duplex, allowing you to live rent-free while building equity using your tenant's money. Leveraging the property's equity later can be used for further investments.

  2. Buy a Home as a Primary Residence: Utilizing VA or USDA loans, you can buy a home with zero down payment. After living in it for a minimum period, you can move out and rent the property, building equity over time.

  3. Look Into Government Loans: Explore government-funded loans such as FHA, USDA, VA, Fannie Mae, Freddie Mac, and others. These loans provide financing options with certain qualification guidelines.

  4. Ask the Seller to Pay For Closing Costs: Motivated sellers might cover closing costs to sweeten the deal. While offering close to the asking price increases the likelihood, it's worth negotiating.

  5. Use a Lender Who Pays for Closing Costs or Offers a Down Payment Rebate: Some lenders, like Quicken Loans, offer options where they cover closing costs or provide down payment rebates, subject to specific qualification criteria.

Investing in Real Estate with No Money: 10 Tips

  1. Use Retirement Funds to Buy Investment Property: IRS allows investing in real estate using retirement accounts like a self-directed IRA or 401k, providing tax-deferred growth.

  2. Look into Seller-Financing: Seller-financing involves the seller providing financing to the buyer, offering advantages such as a quick sale and flexible terms.

  3. Get a Home Equity Line of Credit (HELOC): Borrowing against your primary residence's equity at low-interest rates can fund other real estate investments.

  4. Get a Private Loan: Private loans, funded by individuals or businesses, can be used to buy real estate with no money down.

  5. Consider a Hard Money Loan: If traditional financing is unavailable, hard money loans may be an option, albeit with higher costs.

  6. Try a Wholesaling Strategy: Wholesaling involves connecting sellers to buyers without using your money. Legal considerations should be taken seriously.

  7. Network for Joint-Venture (Equity) Opportunities: Joint ventures involve collaboration between an operating member and a capital member, sharing profits and losses.

  8. Setup a Lease-Option to Buy: Investors can sign an option to buy from a homeowner, agreeing to rent the property with the intention to buy later.

  9. Become a House Hacker: House hacking involves living in a property that produces income, covering part of your mortgage through rent.

  10. Check Out Peer-to-Peer Lending or Micro Loans: Peer-to-peer lending and micro loans offer alternative funding sources, though interest rates may be higher.

Success Story: How Shane Started Investing in Real Estate with No Money

Shane Adams successfully entered real estate investing with a joint-venture, private lender financing, and a $25,000 inheritance. His advice includes hiring skilled contractors, establishing efficient property management, buying already renovated properties, exploring wholesaling, and investing in a growing market.

In conclusion, investing in real estate is not limited to the wealthy. Creative financing and strategic buying can open doors for individuals with limited or no money.

How to Invest in Real Estate with Little (or No) Money (2024)
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