To many, it seems like there’s no way you can get started flipping houses without at least a little money of your own. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free This is of course true to some degree. It’s a lot easier to do any kind of real estate investing with some money—whether it’s buy and hold, flipping houses, or any other type of real estate strategy. However, flipping houses with no money is not only possible, but it’s also not as hard as you might think—even if you’re a new investor. In fact, there’s no “hidden secret” to real estate investing with no money of your own. All it takes is a little bit of hutzpah, some courage to get out of your comfort zone, and an understanding of how to get started. How to Flip Houses With No Money Down Flipping houses without funding projects yourself involves using other people's money (also called "OPM") to fully finance your deals. A lender extends a loan to you to purchase and rehab the property, and you repay them the initial loan amount plus interest on the money they lend. However, traditional banks/traditional lenders are unlikely to extend a loan covering both the property, as well as the rehab. So where do you find OPM for flipping homes? There are lots of places to look when you want to invest with no money down, but here’s a starter list to get you going. Related: 3 Ways to Fund Your Very First Flip 1. Real Estate Investor Partners One of the simplest ways to get started with real estate investing without having to put down your own money is to get a partner who has money to invest. This partner could be a close friend, a business associate, a co-worker, a relative, a business owner, or even another real estate investor or rental property owner. If you can’t think of anyone off the top of your head, then start thinking about the people you see on a regular basis. This may include: Anyone in your network who has a successful business Your doctor or your dentist Your attorney Anyone who invests in the stock market The simplest arrangement in a partnership is for you to ask the partner for the money to finance the deal and for you to do all the legwork to make it happen. In this simple arrangement, you’ll do everything related to the flip but the two of you will split the profits 50-50. In essence, your partner reaps the financial rewards of the deal by chipping in the money but not the time. When you first get into the house flipping business, it may be tempting to create a formal partnership with someone right away. Although this may seem like a good idea, you should probably hold off for now. Although many real estate investment partnerships have succeeded wildly, just as many have gone down in flames. As an amateur home flipper (or new investor in general), remain independent until you have a pretty solid business plan and the flipping know-how you can use to attract a solid partner. Partnering with House Flipping Investors Real estate investors of any sort can make great partners, but investors who are already flipping homes will likely be even better. A veteran home flipper can bring both money, as well as experience, to the table. To attract an experienced investor, the key is to figure out what value you add to the deal. Maybe you have the deal-finding know-how, or maybe you have a long list of contacts. Utilize all your skills, and exhaust all your options. 2. Hard Money Lenders Another great source of funding for a rehab deal is a hard money lender. Hard money lenders are individuals who lend to others at a very high interest rate and usually charge points on top of that. But on the plus side, they tend to care less about whether you have good credit (i.e., solid credit report, high credit score) and instead focus on the potential of the property—specifically what the after-repair value (ARV) will be. This source of OPM can be especially useful if the house you are flipping can be rehabbed and ready to sell quickly, therefore only requiring a short-term loan. Like any other kind of loan, the shorter you hold the loan, the less you’ll pay in interest. The longer you hold the property, the more you’ll pay in interest. And when interest is typically between 14 and 20 percent (often with 4 to 6 points on top of that), hard money loans are especially important to pay off fast. That said, sure, hard money lenders are a great place to start in your real estate career. But there are certainly better sources of funding with better rates. For example, if you borrow $100,000 from a hard money lender at 16 percent and it takes you 6 months from start to finish to pay it back, your interest charges would be $8,000. And if you are required to pay points on top of that, it'll be an even higher price. At 4 points, that's an additional $4,000, for a grand total of $12,000 in interest charges! If you manage to only hold the flipped property half that time, your interest charges would be $6K as opposed to $12K, though. This is why hard money is solely preferable for properties you know you can flip quickly. 3. Private Money Lenders Perhaps the best source of funding for no money deals are private money lenders. Private money lenders are just regular people (family members, friends, acquaintances, etc.) with disposable money, who are looking to invest. (Consider the list above of possible real estate partners when seeking out potential private money lenders. There’s a lot of overlap.) In many cases, these individuals may not be actively seeking investment opportunities; they just have money sitting around that they may be open to investing with you—but only if you ask. Private money lenders might have money in banks, IRAs, 401(k)s, mutual funds, or even an abundance of equity in their home. This money can then be leveraged for real estate investing. Related: 4 HGTV-Level Upgrades to Make Your Flip Stand Out Because you can typically negotiate better interest rates, private money lenders are preferable to hard money lenders. With private money lenders, you get a much higher level of control over terms and interest rates; this is because you set the rules and rates…not the lender. The real key to success with private money lenders is in offering them a high enough interest rate to entice them to invest with you in the first place. The rate has to be lucrative enough to make it worthwhile, but at the same time, fair enough for you to lock in a profit—even in the worst case scenario. Ideally, find out what they are getting in returns on some of their other investments, then beat it. When the stock market is performing erratically, extending a loan on an investment property with a guaranteed rate of return will likely be an attractive proposition to them. 4. Real Estate Wholesaling Wholesaling allows investors to make money from real estate without ever taking ownership. Sounds great for flipping houses, right? If you’re a real estate investor who is looking to wholesale properties, your job is to find properties worth flipping and then get them under contract. You negotiate the terms with the seller, such as closing costs and purchase price. Once you have a property under contract, your next job is to find a house flipping investor to actually purchase the property and complete the rehab. Wholesalers make money based on the spread they negotiate between the deal and the amount the buyer is willing to pay. Alternatively, wholesalers can make money based on a fixed price of the final sale (i.e., when the flipper sells to the end buyer), such as 5 to 10 percent. Given you don’t have to take ownership of the property or do any of the rehab yourself, wholesaling is an easy way to get involved in flipping homes without any money—all while learning the process. The key to wholesaling successfully is building up a group of investors/contacts who are interested in flipping houses prior to putting deals under contract. That way, your job is done once you’ve found the property and negotiated a deal with the seller—the investor handles the closing and rehabs the property. 5. House Flipping and Crowdfunding Crowdfunding is when a group of individuals collectively finance a loan. These lenders (aka investors) each contribute a small amount of the needed funds. In return, they earn interest on top of repayment. This method can be time-consuming when it comes to raising money. However, there are specialty crowdfunding real estate websites that may pre-fund a deal. The downside to crowdfunding is a limited ability to negotiate the deal; however, in some cases, you can avoid a down payment. 6. Seller Financing Seller financing is a great way to purchase homes to flip when traditional lenders, or even the other creative financing options mentioned above, aren’t available. Seller financing is just what it sounds like: having the seller of the property finance the purchase. This means you don’t have to qualify for financing (i.e., have a good credit score) or have a network of private lenders. Investors can search for available properties with optional seller financing or find a fix-and-flip opportunity and reach out to the owner to see if they’re interested in financing it. Granted, seller financing might require a down payment, but it could still be lower than a conventional mortgage or traditional lender. What’s even better, you may be able to avoid paying commissions to real estate agents by dealing directly with the seller. Where to Find Investors for House Flipping The first thing you’ll need to do if you really want to flip houses with no money is to get off the couch and get out there! Order some business cards, and start networking. Immerse yourself in the local real estate market. Surround yourself with people who are actually doing what you want to be doing, such as fellow real estate investors and flippers. The people you meet at networking events are usually some of the best possible partners—as well as potential new investors in your no money house flips. And as long as you stay open to it, you’ll absorb tons of real estate investment information from these people—more than you could ever learn by doing a Google search. Here are a few suggestions to get you started networking in order to find potential partners, hard money lenders, and private money lenders for your house flipping business: Join your local REIA (Real Estate Investors Association)—chances are you’ll find a meeting held in your area Attend real estate investor meetings advertised on Meetup.com Tap into your local Chamber of Commerce, Business Networking International chapter, and other community organizations Volunteer at a local charity Form your own local Real Estate Investors Association or meetup group If you want to join the rank of house flippers, don’t wait for opportunities to come to you. Instead, learn the house flipping business, actively acquire the know-how, and go find investors on your own. Questions? Comments? No money strategies to add to this list? Please leave me a comment below!