3 min read
Let’s talk about how to buy a house with no money at all.
For those of you who have followed me for a while, you know that I do not like or believe in creative B.S.-type investing and buying houses without having any money of your own. I’m a big believer in going out, working hard, and saving $50,000 to $100,000 in cold hard cash.
Prove it to yourself before you start investing that you can do that, and then start your real estate investment journey. But due to numerous requests from a lot of investors, I said screw it, let me give you some of my advice on how you can go into the market and potentially pick up a property without having a single dime.
How to Buy a House If You Don’t Have Any Money
Look, how you can buy a property without having any money at all is by approaching a distressed seller that has had a property on the market for a while. I think that Craigslist is going to be your best bet here. You’re also going to have to convince this person that you are an expert at what you do and that you’ve done this many times before.
So it’s kind of cliche, for all of you that are beginners, because I don’t like these kinds of lies. I’ve always believed that honesty is the best policy—but to each their own. Do whatever you think is right. (I personally wouldn’t do it.)
Again, you would have to approach a distressed seller who is having a hard time selling their property. You’re going to have to approach them with a spiel and speak with conviction that you can aid them with the sale of their property. How would it work?
Related: Young, No Money, No Credit? Work for Experience
Most likely you would enter into a joint venture agreement with this person, have them sign over the property while you fix it up, and then sell the property and split the profits. Alternatively, you can negotiate different terms, or they can give you the property via owner-financing terms. Owner-financing is when you don’t put any money down, and you pay them out over the next five, seven, or 10 years.
Now, when it comes to the rehab costs, I’m not really sure how you can go about that. You’re still going to have to buy supplies from Home Depot, Menards, or Lowe’s, but maybe you can go there and ask for charity. I’m sorry, I don’t have a solution for you there.
Another way not to spend much on labor costs is to do it all yourself. That’s definitely one way of being able to buy a property with no money. Very hard to do, but it is possible.
Another way (which has happened to me many times before) is to have a property basically given to you. The best way of getting deals like this is in the Midwest in tertiary markets like Toledo. And it’s probably going to be in areas that aren’t as desirable.
There are a lot of investors out of state or out of the country who have caught the real estate bug, invested in these markets, and then completely lost their ass. Now they just want out. They don’t want to deal with the city. They don’t want to deal with mowing the lawn. They are burnt out and willing to write off the losses. So, they’ll pretty much give the house away to you.
Related:
It’s happened to me around 10 times over the last five years—an investor asked that we take properties off their hands. Believe it or not, some of them were in such bad condition that we didn’t even take them because it was more hassle than worth.
But the fact is there are instances when you can get properties for free. Or you’re going to have to sell someone on your capabilities to sell that property with no money down.
I don’t believe in these approaches. I believe in putting your money where your mouth is and having cash before you start your investment journey. Anyway, that’s my tip for you on how to invest without any money at all.
What are your thoughts?
I’d love to hear from you in the comment section.
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
