How to make money

I will not lie and tell you everyone can buy houses without any money. It is possible to invest in real estate without money, but it is hard and it will take a lot of work. It will also take getting out of your comfort zone and making changes in your life. There are a lot of people who want to invest in real estate but never do it. To be one of the few who invests you have to take action and a lot of it. I wrote this article to help people who feel stuck because they have no money, but want to make a huge change in their lives. Not only will this article give you some ideas on how to invest in real estate without much money, but I will also give you the first step to make it happen.

First, here are some ways that you can invest with little money (almost anything you do will require some money):


Wholesaling is the most common thing taught to investors who want to make money in the business without any money. Wholesaling is when you find a great deal on a house and then sell it or assign it to another investor without making any repairs. You can make money wholesaling, but you still need some money. The very cheapest way to wholesale is driving for dollars, which means you need a car and a phone. You can probably get started wholesaling with a couple of hundred dollars. To me wholesaling is not really investing, it is a job.

House Flipping

House flipping is when you buy a house, make repairs to the home, and then sell it. Flipping houses takes a lot of money! But you do not have to buy the house for cash. There are many ways to finance a flip. It will not be easy finding ways to finance the entire purchase though.

Rental Properties

Buying rentals involves buying single-family homes, multifamily homes, or even commercial properties and renting them out. Rentals can be an amazing investment, but most banks will require at least a 20% down payment when buying rentals.

The video below goes over how to invest with no money as well:


Is Real Estate Crowdfunding Risky?

Compared to other forms of real estate investing, crowdfunding can be somewhat riskier. This is often because crowdfunding for real estate is relatively new. Moreover, some of the projects available may appear on crowdfunding sites because they were unable to source financing from more traditional means. Finally, many real estate crowdfunding platforms require investors' money to be locked up for a period of several years, making it somewhat illiquid. Still, the top platforms boast annualized returns of between 2% and 20%, according to Investopedia research.

Exchange Property

If you already own property, you may want to exchange it for another property. You could either exchange the property with a buyer, or use it in combination with a small amount of cash to obtain the property you want.

Rent to Own / Sublease Strategy

Another way of buying real estate without much money down is the rent to own strategy. You agree upon a purchase price today but don’t actually buy the property for a year or two.

Instead, you make monthly rent payments to the seller while saving up for the next 12-24 months to afford the purchase when your lease option comes due.

In the mean time, you can sublease the property to a tenant for a higher rent price than what you’re leasing from the owner for and net a profit.

It’s a difficult strategy and involves legal verbage in your contracts to allow it, but can be a profitable way of earning money without owning the real estate yet.


What is your first step?

You can spend years educating yourself and planning. Planning and education are good, but you also have to take action. Complaining about not having money is not an action. Doing something physical that will get you closer to your goal is an action. What is the one thing you can do right now?

Talk to a lender!

When I get emails from people who tell me they have no money or can’t get financing, I ask them what they have done to fix the problem. Most people never respond, but a few tell me they haven’t done anything. Once in a while, someone gives me a great answer about how they are trying to change their lives by saving, working harder, etc. Those are the people I love to help and I talk to more. I ask many people if they have talked to a lender to see if they can qualify for a loan, and almost all of them say no. They claim they know what a lender would say, and they do not want to waste their time.

Seller Financing

Another easy way to acquire property with no money down is with the help of the seller. For example, a seller may decline a down payment in return for higher monthly payments. Or, the seller may pay for the buyer’s down payment in order to sell the property faster.

50/50 Investment Partnership

Don’t have money? Find a partner who can buy the deal for you and let you operate it as “sweat equity”

In other words, your value is all the work and his/her value is the financing. Map out a list of all the tasks you’ll be doing to support your case for gaining 50/50 share.

  • Finding the deals & analyzing them
  • Driving the neighborhoods to vet the deals
  • Contacting contractors to get quotes
  • Communicating with the realtor
  • Managing the rehab
  • Managing the tenants
  • Collecting rents

7. Look for seller financing

Another way to acquire property with no money down is with help from the seller.

Known as “owner financing" or “seller financing,” this type of loan is an agreement where the seller handles the mortgage process instead of a financial institution.

The borrower repays the loan as specified in its repayment terms that are detailed in the formal agreement.

This works especially well with sellers who have no mortgage.

For example, this can happen when someone inherits a property and does not want to keep it.

For sellers that are willing to take on the role of financier, owner financing can help sellers move a home faster with sizable returns on their investment.

4. Sell Wholesale

A fourth way to make money in Real Estate actually can require the investor to have cash, although it is not required. 

This technique is by far the best and easiest way for new, inexperienced investors to make “quick” money in Real Estate. In fact, this is by far the best and easiest way for veteran and seasoned investors to make “quick” money in Real Estate.

Wholesaling is the art, and I use that word on purpose, of being able to accurately appraise the potential value of a property and buy it so low, you can quickly sell it for cash to another rehabber or end user who will make it their dream home, without EVER fixing a thing, regardless of how good or poor the condition of the property.

Now, you may say, I do not need cash for this strategy.  I can simply Option the property for a wholesale price and then sell it to a rehabber or end-user. You are absolutely correct, but getting an owner to accept a wholesale price is rare. 

You will make 100 wholesale offers to owners before one is accepted. 

Where you will have much better luck is buying foreclosures from banks.

While a majority of your initial offers will still be rejected by banks, they are much more likely to accept a wholesale offer. They also will never allow you to Option the property. They only accept cash and will even require you to have Proof of Funds before they even look at your offer. 

12. Become a Real Estate Agent

To begin learning and earning money, you could start a side business or full-time career as a real estate agent. While technically not investing, it’s a great way to learn about real estate transactions and the overall real estate market.

Every state is a little different, but you typically have to take a certain number of classes up front (I took 30 hours in South Carolina). Then you take a comprehensive test and pay your licensing dues with the state.

Additionally, you’ll typically need to find a broker’s office to “hang your license” with. There are many different types of firms and different business models, so you’ll have to find one you’re comfortable with.

And finally, most agents also join their local Association of Realtors and pay for access to the Multiple Listing Service.

The initial investment could cost between $1,000 – $2,000. But you’ll need to invest additional time and energy into lead generation marketing in order to start making some money.

If you want to pursue this career, I recommend starting with the book Millionaire Real Estate Agent by Keller Williams founder Gary Keller.

You can also check out this YouTube playlist from Graham Stephan, who is a successful agent and investor in Los Angeles, California.

1. House Hacking

My first house hack 4-plex (I lived in unit #2)!
My first house hack 4-plex (I lived in unit #2)!

House hacking is one of my favorite ways to start investing in real estate. It basically means you figure out a way to generate rental income from your home.

A classic house hack is moving into a small multi-unit property, like a duplex, triplex, or 4-plex. Then you rent out the extra units for income.

You can also get creative by renting out extra bedrooms to roommates, renting out a basement apartment or guest house, or even renting extra space on your lot to an RV (if your local laws allow it).

And all of this can be started with little money down because you can obtain owner-occupant financing to buy the property. Here are a few loan programs with small down payments that you can use for house hacking:

  • FHA loan (3.5% down)
  • VA loan (0% down for veterans)
  • USDA (0% down in rural areas)
  • Conventional loans (3% to 10% down with mortgage insurance)

With a $200,000 property, for example, this means you may put $0 to $7,000 down with some of these programs!

>> Want to get started? Check out my house hacking guide. <<

How to get started in real estate

If you choose to invest in real estate, follow these five steps to get started:

  1. Save money: Real estate has some of the most expensive barriers to entry of any of the asset classes. Before you get started, you’ll want to pay off your high-interest debt and have significant savings.
  2. Choose a strategy: Each of the strategies listed above can be successful. If you choose to buy REITs or funds, you can do online research about your options to help you get started. If you want to buy physical property, you’ll need to decide on a market.
  3. Assemble a team: You may want to work with an agent when you get started. Great agents will send you off-book opportunities that haven’t been listed yet. Eventually, you could need someone to manage your properties and an accountant to handle the financials. If you become successful, you may eventually need investors, too.
  4. Do deal analysis: Whether you’re investing in residential or commercial real estate, you should do plenty of research on any investment. For example, with rental properties, you’ll need to analyze what future rent payments could be, what expenses you may be liable for, and forecast what you could sell the property for.
  5. Close the deal: The final step is pulling the trigger. Close on your property, or make the buy in your brokerage account.

1. Online Real Estate Investing Sites

Online investing sites have changed the game in recent years. With these sites, you can own fractional shares of real estate projects. What this means is that you can get exposure to real estate, but you don’t need to come up with huge sums of capital or deal with tenants. This is a strictly passive income strategy.

Fundrise is my top pick in this category because you can start with very little money and you do not need to be an accredited investor. Here’s a link to our full Fundrise Review.

For other sites, you must certify that you have a net worth over a certain amount or make a certain amount of money per year.

How It Works

With Fundrise, you can start with as little as $500. You open an account and select from a number of portfolio options. Fundrise charges a management fee of around 1% per year, which is fairly low compared with other options, and its 2021 annualized return was 22.99%! You can see how my Fundrise account has performed here.

What You Gain

Investing this way, you gain a ton of freedom and you gain exposure to the real estate asset class with very little money or effort. 

What You Risk

You don’t get to really use any local expertise you may have, and you don’t necessarily get the pride that comes from visiting a real estate project that you wholly own, improve, and can see easily. For some people, that’s a big draw to investing the old-fashioned way!

Get Started With Fundrise

2. Leverage home equity with a HELOC or cash-out refinance

Using a home equity line of credit (HELOC) or cash-out refinance to buy property is another financing option for existing homeowners.

If you own a home, you may be able to use your home’s equity for a down payment on your next place.

One way to do that is by borrowing cash secured against your home equity. Homeowners may be able to obtain a standard home equity loan, or a HELOC, to fund a down payment.

Using a HELOC, you secure a line of credit against your home, and then draw on it whenever you need cash flow. And you can begin paying the loan back with rental income.

Cash-out refinance

The other type of loan that leverages your home equity is cash-out refinancing.

A cash-out refinance lets you refinance your mortgage for a higher amount than you actually owe. Then, you take that extra loan amount out as a lump sum of cash.

In this scenario, the money advanced to you by a cash-out refinance can be used to make the down payment on an investment property.

In other words: If you have enough equity in your current home, you may be able to start investing with no money out-of-pocket.

Avoid Becoming House-Poor

There is a phrase in real estate and finance called “house-poor.” The term describes people who stretch themselves too thin when buying a home and are left without any emergency money. When unexpected events happen, such as a job loss or broken appliance, these homeowners are in such a tight spot financially that it is difficult to recover. Unfortunately, this is all too common when attempting to invest in real estate with no money.

There are a few ways to avoid being backed into a corner financially when purchasing real estate. It is always a good idea to keep your emergency fund separate from other money and not include it in your estimates when buying a house. That way, if anything were to happen, you have funds you can rely on. In some cases reserving your emergency money may force you to make a smaller down payment than you want. Remember that even if you are required to get mortgage insurance initially, you can always refinance down the road when you have more equity in the home.

8. Home Equity Loan

When property values are high, a home equity loan could be a viable real estate investment option for you if you have no upfront money available. With more equity in your home, you can capitalize on two options: do a cash-out rewrite and refinance on the first mortgage loan, or keep the first loan and take out a home equity line of credit, also known as a HELOC.

Learn More

Be sure to shop around for lenders that allow investors to take out HELOCs on rental properties.

4. Wholesaling

Real estate investors can make huge profits in real estate wholesaling. This strategy involves wholesalers selling multiple properties to a retail seller, who then renovates and sells them to a third-party buyer at a much higher cost. The wholesaler can charge the retailer a lower price because of the volume sold to the retailer.

Why Should I Add Real Estate to My Portfolio?

Real estate is a distinct asset class that many experts agree should be a part of a well-diversified portfolio. This is because real estate does not usually closely correlate with stocks, bonds, or commodities. Real estate investments can also produce income from rents or mortgage payments in addition to the potential for capital gains.

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