Can you really buy a property with little to no money?

95 Replies

I’ve seen a lot of videos saying you can purchase a property with little to no money. I’m not entirely sure how this works, if it’s possible, or if it’s just a ploy to get you to click on their video.

I’ve also heard some people say that it’s impossible but I don’t really know which to believe. If someone could clear this up for me that’d be awesome.

@Javen Bowman

Of course it’s “possible”. But your energy would be put to better use thinking of creative ways make and save money, rather than ways invest with no capital.

If you look into wholesaling it could be a great way to start as long as you know how to analyze a deal, and that takes very little money to start. Especially if you have a buyer waiting to purchase something you find after its under contract. Real estate is creative there are a ton of strategies to employ just keep reading the forums. I have to agree with Jonathan though unless your really ambitious and ready to take the plunge having money ready makes it a whole heck of alot easier. 

Yes...and no.  Yes, you can buy property with no money out of your pocket, but someone has to pay something.  It just doesn't have to be you.  To do this, you need to have an in depth understanding of how money works, but there are many (probably an unlimited number of ways) to do this.

Originally posted by @Javen Bowman :

I’ve seen a lot of videos saying you can purchase a property with little to no money. I’m not entirely sure how this works, if it’s possible, or if it’s just a ploy to get you to click on their video.

I’ve also heard some people say that it’s impossible but I don’t really know which to believe. If someone could clear this up for me that’d be awesome.

Who is going to make the mortgage payment and pay for title title insurance, escrow, homeowner's insurance? Who is going to pay the power bill, water bill, property taxes, repairs, etc?

Every property I bought "no money down" has cost me money ;-)

 

Usually how that works is if you partner with someone. Typically they fund the deal (these are people who have alot of money but dont have the time to invest/ or the have IRA) and you find the deal and do all the nitty gritty things. Another way is seller financing which essentially mean the seller is the bank and you pay the seller every month because they hold the note until you pay it off.

1. Equity partner
2. Seller Fiancing
3. House hacking

These are the main ways to get into Real estate with little to no money.

@Javen Bowman

How it works is a pretty face or a slick shiny shirt is used to pitch uneducated folks a pipe dream, usually followed closely by a “coaching system” and/or “personal mentorship”. The cliff notes version of this is found in abundance on pretty much every social media platform.

Real estate costs money. It may not be your money but it costs money. And being that you’ve placed this in the “starting out” category I would suggest spend the next six months reading as many books as you can on real estate investing. After that, spend minimum 6 months providing whatever value you can to someone you know who is actively investing in the geographic area and asset type you think you may want to invest in. Learning from others mistakes is much much cheaper.

Originally posted by @Javen Bowman :

@John Farady

You’ve got a fair point, those are everything people never mention in the videos but are things I’ve always thought about.

 It doesn't matter what the total cost is for a property.  What matters is how it is paid and who pays for what.

It doesn't matter what the total return is on a property.  What matters is how that return is received.

There’s a saying in the car world “there’s no replacement for displacement.” Meaning, the best way to go fast is to just plain have a big engine. Real estate seems similar...you could buy property with small resources, but you’re gonna have to be real creative. And I am not a creative man.

Originally posted by @Andrew Carlson :

There’s a saying in the car world “there’s no replacement for displacement.” Meaning, the best way to go fast is to just plain have a big engine. Real estate seems similar...you could buy property with small resources, but you’re gonna have to be real creative. And I am not a creative man.

I like that. 

 

The conventional loans (mortgage) issued by banks (financial institutions) backed by the federal government (FHA, VA, USDA) are likely the type of loans that have the lowest mortgage down payment requirements (0-3.5%). A simple googling you will find relative information that gives you the right answer.

Here is one: https://www.rocketmortgage.com/learn/how-to-buy-a-house-with-no-money-down#:~:text=There%20are%20currently%20two%20types,for%20a%20zero%2Ddown%20mortgage.

I think you should call around and ask for mortgage lenders and banks to get more info. 

Honestly, saving up 5-10% down payment that qualifies you for a $150,000 mortgage is not that hard. Drive Uber eat or Instacart on the night and weekend for like 3 months will get you there, just one example.  

@Jonathan Anderson

I’ve thought about going in with a partner. My problem is finding a value that I would bring to the table. I mean, I have no problem doing quite literally all the hard work myself but the issue that brings up for the person with the money is that I don’t necessarily know what I’m doing.

My first property will quite literally be my guinea pig. It will be where I find out everything on my own or with the help of others and it could be a risk for their money cause I could make a mistake that costs them their own money but none of mine.

I don’t really want to do that to anybody and no body wants that happening to them so I don’t think that would work for me in this case. Maybe in the future but not right now.

@Billy Zhao

I've been told to stay away from FHA's and VA's and other things. Not sure the difference between those versus other types of loans though. And I'm currently in the works of trying to get something on the side so I can make extra money to save up for my first rental. Saving money for my first one is a thrill too, just knowing that after getting the first purchase that my possibilities are now endless is exciting.

I got denied by postmates actually cause of a speeding ticket and DoorDash is being annoying and refusing to take my bank account info so I’m kinda stuck trying to figure out other services I could provide for people. Either way, I’m going to get one figured out

@Kris H.

What sort of services does someone who knows nothing provide to someone that seems to know everything they need to know and already have the resources they need? Only things I could think of is finding deals for them or checking out possible units, stuff like that except work for free you know

@Javen Bowman yes you can but depending on your end goal and your risk tolerance it's not always the best situation. I recommend putting some skin in the deal. But there is no right answer, it's just a matter of what you want to put up with 👍.

Originally posted by @Javen Bowman :

@Jonathan Hulen

I simply don’t know enough yet to be able to come up with creative ways. So I guess I’m stuck with the regular methods lol

By “creative” I mean get a second job or side hustle. I’ve never been into trying to reinvent the wheel. Work more than everyone else, save money, buy houses. That’s my super sophisticated strategy. It’s worked so far so I keep doing it.  

Originally posted by @Billy Zhao :

The conventional loans (mortgage) issued by banks (financial institutions) backed by the federal government (FHA, VA, USDA) are likely the type of loans that have the lowest mortgage down payment requirements (0-3.5%). A simple googling you will find relative information that gives you the right answer.

Here is one: https://www.rocketmortgage.com/learn/how-to-buy-a-house-with-no-money-down#:~:text=There%20are%20currently%20two%20types,for%20a%20zero%2Ddown%20mortgage.

I think you should call around and ask for mortgage lenders and banks to get more info. 

Honestly, saving up 5-10% down payment that qualifies you for a $150,000 mortgage is not that hard. Drive Uber eat or Instacart on the night and weekend for like 3 months will get you there, just one example.  

 Except there is an unlimited number of right answers

Originally posted by @Manilla Tasty:

@Javen Bowman yes you can but depending on your end goal and your risk tolerance it's not always the best situation. I recommend putting some skin in the deal. But there is no right answer, it's just a matter of what you want to put up with 👍.

 My risk goal is 0%...which is why I would prefer to NOT have any skin in the game.

It is possible, but very difficult. About 25 years ago, I was working for an owner of a beautiful four-plex. The owner had terminal cancer and he wanted me pay off the loan on the property that was about $100,000 with no other costs and he was going to give me $45,000 at the close of escrow. Like a fool, I turned the deal down because I was in the middle of a divorce at the time and not in the mood too deal with real estate.

On another job, the owners of a 6-unit property I was working on were both about to pass away any minute. They wanted to give me the property absolutely free. They asked me for all my information and they paid for an attorney to transfer the property. As luck would have it (not for them) the attorney was working on the transfer like all attorneys do, for about 6 months, and both owners passed away and the property went to probate court. I did not bothered to pursue it.

I had another customer who owned a home worth about $50k, but this owner never offered me is home. Instead, he owned me $8,000 he never paid. He went to the hospital and someone picked up the property on his deathbed for $60,000 and I think hospital beds is where a lot of real estate is traded.

@Javen Bowman

Find their pain point. Everyone has one (usually several). Get rid of it for them or else reduce it noticeably. Maybe they hate checking email. Maybe they hate doing books. Maybe they hate tenant screening. Listen when they complain about something. Notice when they express frustration in their face if they aren’t a complainer. After that “hey ___, I noticed the other day _____ didn’t seem to be going to well, I did some digging online with some wiser folks than I and think that if you were able to ___, _____, or ____, it might make life easier. Want me to set it up for you?”