how to invest in real estate with no money

So here’s the deal: you want to invest in real estate, but you don’t have enough money. Worse of all, your credit score is as bad as it can be. What if I told you that you could invest in real estate even with bad credit or no money at all? How? by following the steps outlined in this article.

Purchasing and owning real estate is a rewarding and profitable investment strategy. Prospective real estate owners, unlike stock and bond investors, can utilize leverage to purchase a property by paying a percentage of the total cost now and then repaying the remainder, plus interest, over time. But what if your credit score is too bad? Below are guidelines for you:

How To Invest In Real Estate With No Money or Bad Credit

#1. Obtain a Hard Money Loan

A hard money loan is an excellent choice for real estate investors with less-than-perfect credit. Despite its moniker, “hard” money isn’t difficult to find. It’s everywhere.

Private individuals or groups known as “hard money lenders” make short-term loans secured by real estate. These lenders are solely interested in investment projects; they will not fund a home purchase for personal usage.

The best aspect is that hard money loans can provide you with funds rapidly – often within a few days.

This is why so many real estate investors rely on it.

They’re quick, painless, and simple to reverse.

Credit ratings are not the be-all and end-all for hard money lenders; they can dictate who they lend to and what those loans look like. If your credit score is good, that’s fantastic!

However, if this is not the case, your application is still accepted. The majority of the time, hard money lenders are simply concerned with one thing: whether or not the deal is a good one.

Their primary focus is the home’s worth. If the mathematics add up, they’ll probably fund the sale whether you have a 780 credit score or not.

The property will be used as security by a hard money lender. If you do not repay them, they will take ownership of the property. That is why they are concerned about the figures.

Even if you hit rock bottom, they’ll still make money.

So, if you have a strong business with good profit potential, a hard money lender will almost certainly fund it – even if your credit score is just. . . eh.


Although a low credit score will not prevent loan approval, the interest rates will be higher than on regular bank loans. Depending on the lender, most interest rates range from 10% to 15%. Borrowers who use hard money must also pay “points,” which are a percentage of the loan amount. Points can range between 2% and 4% of the entire loan amount.

So, you’ll pay higher fees in exchange for convenience, but that’s fair, given the possible profit.

Another issue is that they may not cover the entire cost of purchasing the property. These lenders often lend between 65 and 75 percent of the property’s current value. Some lenders will make loans based on the property’s worth after it has been improved, sometimes known as the “after-repair value” (ARV).

That leaves you with the option of covering the difference yourself or finding another source of funds to bridge the gap.

#2. Find Private Money Lenders

Private money lenders are another option to investigate.

Anyone searching for a return on their investment can contribute private money. Anyone can be a structured lender, a friend, a relative, a business partner, or an acquaintance.

Even if your credit isn’t perfect, private money lenders can nevertheless lend to you, frequently on favorable conditions. A private money lender is far more concerned with the quality and value of your transaction than with your credit score.

Private money lenders do not follow a set of rules. So repayment terms, interest rates, and everything else is negotiable.

And because it’s their money, they pick whether or not to run your credit.

Private money lenders may ignore faults on your credit report if you can demonstrate that your deal has value and that you can close swiftly — and profit quickly.

#3. Find a Partner

Many people are interested in real estate investing and would gladly use their credit to fund projects if they didn’t have to perform the difficult effort (your work).

So why not form a collaboration with someone like that? Someone with perfect credit? In exchange, you’ll be able to secure extra funding for your transactions.

It’s the ultimate win-win situation.

A friend, relative, coworker, neighbor, or someone you met at a local networking event or Facebook group could be your companion.

Remember that you want to collaborate with someone who has the abilities and resources that you lack, and vice versa.

You lack credit in this instance, so associate with someone who has outstanding credentials and can arrange money for your deals. And perhaps you have something they don’t.

You may want to think about the best strategy to consolidate credit card debt and begin rebuilding your credit history for long-term financial success.

So, what do you have to offer? It might be your time, your negotiation abilities, or another resource. You can form a 50/50 partnership and split the profits once the transaction is completed.

If you decide to take this path, you should document your agreement by selecting a business structure and then establishing your company.

This will safeguard your personal assets if your partnership encounters difficulties in the future.

Consult a business lawyer before forming your company.

#4. Make the buyer the bank (Seller Financing)

Seller financing is a strategy that works best for fully owned and paid-off houses. It is another way to invest in real estate with no money. If a seller does not require “quick cash” from the sale of their home and cash flow is not an issue, this strategy could be an excellent choice.

When a seller finances a transaction, they effectively become the bank.

To put it another way, you have a mortgage with the seller.

The seller allows you to make monthly payments under these agreements until you pay off the property or the loan term expires.

Advantages of Seller Financing

  • There is little or no qualification.
  • Terms are negotiable.
  • Credit is not a consideration.
  • adaptability to changing circumstances
  • Closing costs are extremely low.

Seller financing can be a win-win situation for everyone. The seller sets the terms, and many will not ask to see your credit score or delve too deeply into your finances.

Meanwhile, the seller receives a monthly income.

A retiree, for example, may enjoy the idea of receiving a fixed monthly payment for their home. Similarly, a landlord may want to sell a property without completely exiting the market.

A seller financing agreement could satisfy all parties in both cases, allowing you to build capital and credit along the way.

So, how do you go about finding a property owner who is willing to do this? There are several options available to you:

Vacant Homes – Vacant homes offer a fantastic opportunity. Look for them as you drive around your neighborhood. Then, contact the owners to see if they are interested in such an arrangement.

Absentee Landlords – Someone who owns an investment property but does not live in it is known as an absentee landlord. Purchase absentee landlord lists from or After you’ve identified prospects, reach out to them to see if they’re interested in your offer.

Real Estate Industry Gatherings – Attend local real estate meetings and industry gatherings. These types of events are excellent places to network and meet people who may be looking to sell an investment property.

#5. Think about wholesaling.

For new real estate investors, wholesaling is a common first step. Because you are not required to fund anything with this method, your credit score often has no bearing.

What Is the Process of Real Estate Wholesaling?

Find a seller who wants to sell their home using the DealMachine app. You then negotiate the price and terms with the seller and put together a purchase agreement.

Instead of purchasing the home yourself, you find another buyer. This could be another investor looking to fix up the house or a landlord looking for a rental.

That buyer will assume all of the terms mentioned in your purchase agreement and will complete the transaction.

They acquire ownership of the house, the seller receives the agreed-upon payment, and you receive a “assignment” fee for arranging the transaction.

Many real estate investors begin by wholesaling in order to accumulate funds. A solid wholesale deal can save you $5,000, $10,000, $20,000, or even more.

A few of those trades could help you rebuild your credit while also generating significant capital.

#6: Purchase/Lease Option

If you’re wondering how to invest in real estate with no money, a rent-to-own lease is a terrific option. It is also a reasonable alternative for property owners who are considering selling but are not in a hurry.

The landlord is interested in selling in this strategy, but not right now. The tenant agrees to pay their rent as well as an additional amount each month towards a down payment. The landlord has a guaranteed sale at the end of the lease.

The tenant can obtain ownership of the property — and hence real estate — without having to pay a large sum of money.

#7: House Hacking

House hacking is another technique to invest in real estate with no money and bad credit.

House hacking is the process of generating revenue from a primary house in order to offset the monthly mortgage payment.

One of the following choices could be rented:

  • An additional bedroom
  • A recording studio
  • Housing for ADUs

Even if you have no money and low credit, you can buy a house and utilize the income from house hacking to pay down the mortgage. In rare situations, you may be able to live rent-free.

Some investors would even buy modest multifamily properties (four units or less) that qualify for favorable financings, such as government-backed loans, and reside in one unit while renting out the others.

#8: REITs

REITs are ideal for those who wish to own an investment property without making a large cash investment and who do not want to be a landlord.

A REIT, or real estate investment trust, is a type of investment in which at least 100 stockholders possess a collection of properties or other real estate-related assets.

Consider it similar to a mutual fund but for real estate.

REITs require little time investment and allow you to diversify your portfolio while minimizing risk with a low entrance barrier.


The BRRRR strategy consists of five distinct steps: Buy, Rehab, Rent, Refinance, Repeat

Using the BRRRR strategy, you can secure your first property with hard money loans or private money loans; the crucial thing is that you can refinance the property and use the money to secure a second property, and so on. It’s a different method to invest in real estate if you have lousy credit and no money.

#10. Government Loans

Many loans, such as the FHA Loan, USDA Loan, or VA Loan, have minimal credit score criteria and cheap down payments, and the property can subsequently be used as an investment property.

While most people utilize these loans to buy a single-family house, they can also be used to finance multifamily properties with two to four units.

Keep in mind, however, that you will need to use the property as your primary residence for a period of time and live next door to your tenants.

Read Also: HOW TO PAY OFF MORTGAGE IN 5 YEARS: A Comprehensive Guide

Why Should I Include Real Estate in My Investment Portfolio?

Real estate is a separate asset class that, according to many experts, should be included in a well-diversified portfolio. This is due to the fact that real estate does not typically correspond with equities, bonds, or commodities. In addition to the potential for capital gains, real estate investments can generate income through rent or mortgage payments.

What is the cheapest real estate to invest in?

Lots and raw land are often the most inexpensive forms of property. For those with meager resources, this can be a major selling point. They can be purchased with cash and, if not rented out, have very low holding costs.

How do beginners make money in real estate?

If you are in the real estate niche as a beginner, then you should look at these tips that can help you earn money faster.

  • Lend to investors
  • House hacking
  • Invest in turnkey properties
  • Invest in single-family homes
  • Rent out properties on Airbnb
  • Manage real estate properties

What type of real estate is best for beginners?

When starting out in real estate investing, REITs are the best bet because of how simple they are to use. The abbreviation for “real estate investment trust” is “REIT.”

How do I start off investing in property?

The best way to get started in real estate investing is to contact a property investment firm and ask them about the opportunities that interest you. In this way, you can get first-hand information about the real estate market and learn how to begin a property investment venture within your financial means.

Which is probably the easiest way to own real property?

One of the simplest types of property ownership, sole ownership, gives one person complete authority over the property’s management, use, and sale. All of the property can be sold, given away, or left in a will by the sole owner. Alternatively, you can transfer ownership to a trust.

Can you get rich quick with real estate?

There is no get-rich-quick scheme in real estate, but smart investing can build wealth steadily over time. As you probably already know, real estate is one of the most efficient ways to amass wealth.

In Conclusion,

It’s way easier to invest in real estate if you have a good credit score, but it doesn’t mean that it’s impossible if you have bad credit. You just have to play your cards well, and voila, you’ll soon become the next real estate owner.

Frequently Asked Questions

What is the lowest amount you can invest in real estate?

You can invest in real estate for as low as $10.

Can I invest in real estate with $100?

Yes, you can invest in real estate for $100.

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