• Skip to primary navigation
  • Skip to main content
Good Financial Cents®
Content is based on in-depth research & analysis. Opinions are our own. We may earn a commission when you click or make a purchase from links on our site. Learn more.
  • Make Money
    • Get Money Now
      • Ultimate Guide to Making Money
      • Need Money Now
      • Get Free Money Fast
      • Make Money Fast
      • Make $1K Per Month
      • Make $100 Per Day
    • Control Your Destiny
      • Self Employed Jobs
      • Make Money from Home
      • Hobbies That Make Money
      • How to Become a Freelance Writer
      • Small Business Ideas to Start
      • How to Become an Independent Contractor
      • Best Online Jobs
    • Passive Income
      • Passive Income Ideas
      • Multiple Streams of Income
      • Extra Income
      • Residual Income Ideas
      • Learn to Sell e-Books
      • Make Money on Facebook
      • Make Money on Tiktok
      • Best Online Survey Sites to Make Money
    • Explore More
      • Best Side Hustle Ideas
      • Make Money for Teens
      • Best Online Colleges
      • Best Jobs No College Degree
      • Become a Millionaire
      • Careers for the Future
  • Manage Money
    • Best Of
      • Budgeting Tools
      • Personal Finance Software
      • Best Cashback Cards
    • Company Reviews
      • Personal Capital vs Mint
      • Personal Capital Review
      • SmartAsset Review
    • Guides
      • Buy or Lease a Car
      • What is Liquid Net Worth?
      • Setting Financial Goals
      • How to Budget
      • Ways to Save Money
    • Explore More
      • How Much Car Can I Afford?
      • Best Auto Refinance Companies
  • Invest
    • Best Of
      • Best Short and Long-Term Investments
      • Best Low Risk Investments
      • Best Online Stock Brokers
      • Best Crypto Exchanges
      • Best Short Term Investments
      • Best Long Term Investments
      • Best Trading Platforms
      • Best Investment Apps
    • Company Reviews
      • Lending Club
      • Robinhood
      • M1 Finance
      • Ally
      • TD Ameritrade
      • Fundrise
      • Betterment
      • Etrade
      • Wealthfront
    • Guides
      • Investing for Beginners
      • Investing Small Amounts of Money
      • Investing in Real Estate
      • No Money Down Real Estate
      • Bonds vs Stocks
      • Peer to Peer Lending
      • Best Hedges Against Inflation
      • Safe Bitcoin Investing in 2023
    • Explore More
      • Bitcoin vs. Real Estate
      • Betterment vs Wealthfront
      • Investing for College Students
      • Stock Market Alternatives
    • By Investment Amount
      • How to Invest $100
      • How to Invest $1K
      • How to Invest $2k-$3k
      • How to Invest $5K
      • How to Invest $10K
      • How to Invest $15k
      • How to Invest $20K
      • How to Invest $30k
      • How to Invest $50K
      • How to Invest $100K
      • How to Invest $200K
      • How to Invest $500K
      • How to Invest $1M
  • Taxes
    • Best Of
      • Best Tax Relief Companies
      • Best Tax Software
    • Guides
      • Federal Income Tax Guide 2023
      • Taxes and Cryptocurrency
      • How to Do Your Own Taxes
      • How to Invest Your Tax Refund
      • Hiring a Professional Tax Preparer
      • Tax Tips for Freelancers
    • Company Reviews
      • TurboTax Review
      • H&R Block Review
      • Taxslayer
      • Tax Act
  • Insurance
    • Best Of
      • Best Life Insurance
      • Best Home Insurance
      • Best Auto Insurance
      • Cheap Term Life Insurance
      • Car Insurance For Young Adults
    • Guides
      • Term vs Whole Life
      • Different Types of Car Insurance
      • Average Cost of Car Insurance
    • Explore More
      • Life Insurance Over 50
      • Life Insurance Over 80
      • $1 Million Life Insurance
      • $2 Million Life Insurance
      • $3 Million Life Insurance
    • Company Reviews
      • Banner Life Insurance
      • Ladder Life Insurance
      • Health IQ
      • Haven Life
      • Policygenius
      • State Farm Auto Insurance Review
  • Retirement
    • Roth IRA
      • Best Places to Open a Roth IRA
      • Best Investments for Roth IRA
      • 7 Roth IRA Secrets
      • Roth IRA Conversion Guide
      • Roth IRA Rules
      • Roth IRA vs Roth 401k
      • Are Roth IRA Contributions Tax Deductible?
    • 401(k)
      • 401(k) Limits
      • 401(k) to Roth Rollover
      • Is 401(k) Enough for Retirement?
      • Maxed Out 401(k): What's next?
    • Traditional IRA
      • Traditional IRA Rules and Limits
      • Traditional IRA vs. 401(k)
      • Simple IRA Rules
      • SEP IRA Rules
      • How Much Do You Need to Start an IRA?
    • Explore More
      • SEP IRA vs. Roth IRA
      • 457 Plan for Successful Retirement
      • 401a Rollover Rules
      • How to Retire at 50
      • How to Retire at 55
  • Banking
    • Best Of
      • Best National Banks
      • Best High-Yield Savings Accounts
      • Best Checking Accounts
      • Best Savings Accounts
      • Best CD Rates
      • Best Money Market Accounts
    • Company Reviews
      • BBVA
      • Synchrony
      • Wells Fargo
    • Explore More
      • 9 Banking Alternatives for 2023
      • What is a Credit Union?
  • Home
    • Best Of
      • Best Mortgage Lenders
      • Best Mortgage Refinance Companies
      • Best Home Warranties
      • Best Homeowners Insurance
      • Best VA Loans
      • Best Mortgage Rates
      • Best Moving Companies
      • Best Home Security
    • Guides
      • Home Buying Checklist
      • Online Home Appraisal
      • How Much House Can I Afford?
      • First-time Homebuyer Programs
      • How to Get Approved for a Home Loan
      • Save Money When Building a House
      • How to Save for a Downpayment
      • When to Refinance Your Mortgage
    • Explore More
      • 15 vs. 30-year Mortgage
      • Home Warranty vs. Home Insurance
      • Veterans United Home Loan Review
      • Quicken Loans Review
      • HELOC vs Second Mortgage
      • DCU Mortgage Review
      • Costco Mortgage Program Review
      • USAA Mortgage Loan Review
  • Credit
    • Best Of
      • Best Credit Repair Companies
      • Best ID Theft Protection Services
      • Best Credit Report Options
      • Best Bad Credit Loans
    • Guides
      • How to Build Your Credit Score
      • How to Raise Your Credit Score in 5 Months
      • How to Dispute Your Credit Report
      • Hot to Remove Collections from Your Credit Reports
      • How Identity Theft Destroys Your Credit Score
    • Explore More
      • What is a Good Credit Score?
      • What is a Bad Credit Score?
  • Debt
    • Best Of
      • Best Debt Consolidation Loans
      • Best Personal Loans
      • Best Student Loans
      • Best Student Loan Refinance
    • Guides
      • What is Debt Consolidation?
      • How to Get Out of Debt
      • How to Get a Personal Loan Approved
      • How to Pay Off Student Loans Faster
      • Should I Consolidate My Debts?
      • Should I File for Bankruptcy?
    • Company Reviews
      • Credible
      • Sofi
Advertiser Disclosure (How We Make Money)
GoodFinancialCents.com has an advertising relationship with the companies included on this page. All of our content is based on objective analysis, and the opinions are our own. For more information, please check out our full disclaimer and complete list of partners.

How to Invest in Real Estate with No Money

Jeff Rose, CFP® | December 21, 2022

Is it possible to invest in real estate with no money? If you watch “how-to-get-rich-in-real-estate infomercials” on TV and the Internet, everyone and their dog seems to be getting rich doing just that – but can you believe them?

You can invest in real estate with little to no money upfront, but it’s more complicated than the promoters make it seem, and you’ll need to be patient. Real estate isn’t a get-rich-quick scheme.

What you won’t find here are exotic real estate investment strategies, like fixes and flips, which require a lot of capital and are more sophisticated than HGTV programs would have you believe.

Table of Contents

  • Physical Real Estate Investing: Four Things to Consider
  • How to Invest in Physical Real Estate with No Money
  • 1.  FHA Mortgage with Down Payment Assistance
  • 2.  FHA Mortgage with a Gift
  • 3.  Conventional Mortgage with a Gift
  • 4.  Borrow the Down Payment from Your 401(k)
  • 5.  Buy with a Home Equity Line of Credit (HELOC)
  • 6.  Lease with the Option to Buy
  • Risks Factors of Investing in Real Estate with Little to No Money
  • Alternative Real Estate Investments
  • Real Estate Investment Trusts (REITs)
  • Real Estate Crowdfunding
  • Final Thoughts
  • FAQ’s on Investing in Real Estate With No Money

Physical Real Estate Investing: Four Things to Consider

Shopping for a mortgage? Credit score and a verifiable income source are critical factors often glossed over by the “get-rich-in-real-estate” fraternity.

Here are four qualifiers for investing in physical real estate, whether you have a large down payment, a small one, or no down payment at all:

  1. Sufficient income to carry the mortgage payment.
  2. Stable employment/income.
  3. Good to excellent credit.
  4. Lenders may require “cash reserves” on multifamily properties.

All four qualifiers should be in good working order if you plan to purchase a physical property.

For example, you might get by with an average credit score, but your likelihood of approval will be higher with good to excellent credit. And the higher and more stable your income, the more easily you can qualify for financing.

Credit score and a verifiable income source are critical factors often glossed over by the “get-rich-in-real-estate” fraternity.

Also, lenders are more cautious when financing investment properties and multi-family homes. Lending requirements are more rigid than if you are purchasing a single-family principal residence.

They will ensure you have sufficient income to qualify for the financing you need, the source is stable, and you have good or excellent credit. If not, build your credit score as the first order of business.

How to Invest in Physical Real Estate with No Money

two people reviewing a contract at a desk with a model house in the foreground

If your income and credit are in good shape and depending on your situation, you may be able to use one of the following six methods to purchase real estate with no money.

1.  FHA Mortgage with Down Payment Assistance

FHA mortgages are not available for investment properties. But you can purchase a 2 – 4 family property with a down payment of just 3.5% of the purchase price. That’s $17,500 on a $500,000 property.

And if you qualify for down payment assistance, you won’t need any money upfront.

Every state has down payment assistance programs, and the specific terms and requirements vary with each program. But regardless of where you live, your income will need to fall into a specific range.

For example, their requirements may be that your income cannot exceed the median household income for the area (or a percentage of the median, like 150%.)

In most cases, down payment assistance doesn’t need to be repaid as long as you live in the property for a minimum time period. You must be an owner-occupant to qualify. And unfortunately, some down payment assistance programs may limit availability to single-family, owner-occupied properties only.

2.  FHA Mortgage with a Gift

Even if you can’t qualify for down payment assistance, FHA will allow you to make a down payment with a gift from a family member. You can get 96.5% financing on the first mortgage, with the remaining 3.5% coming from the gift. You won’t need to provide any funds out of your own resources.

3.  Conventional Mortgage with a Gift

If purchasing a 2 – 4 unit property using a conventional mortgage, you will generally be required to provide at least 5% of the purchase price out of your own funds. But if your down payment is 20% or more of the purchase price, the entire down payment can come from a gift.

The gift strategy will only work if you occupy one of the units. If you are purchasing a property strictly for investment purposes, the lender may require you to provide the entire down payment from your own resources.

4.  Borrow the Down Payment from Your 401(k)

One of the fundamental rules of first mortgage lending is that you can’t borrow money for the down payment because lenders are trying to avoid 100% financing strategies and the risks they present to lenders.

But there is a workaround. Lenders will allow you to borrow down payment funds if they are secured.

For example, you can borrow against your employer-sponsored 401(k) program to cover the down payment. Under IRS regulations, you can borrow the lesser of 50% of the vested value of your plan, or $50,000. Check with your employer to see if your plan permits loans, as employers are not required to offer them.

401(k) loan proceeds can be used in connection with either an FHA or a conventional mortgage.

Note: Since a 401(k) loan is secured, lenders will generally not count the payment against you for income qualification purposes.

5.  Buy with a Home Equity Line of Credit (HELOC)

You must be a homeowner with substantial home equity to use this option. And some HELOC lenders may prohibit using HELOC proceeds to buy an investment property. If you plan to go this route, check with the lender first to ensure no such restrictions apply.

Similar to a 401(k) loan, a HELOC is a secured loan and an acceptable source of funds for a down payment. However, unlike a 401(k) loan, the lender will count HELOC loan payments against you for income qualification purposes.

But if you have equity, this is one of the best ways to avoid using cash for a down payment on a second property.

6.  Lease with the Option to Buy

The option of leasing a property before buying is not a standard form of home financing, though it does exist. But it requires two willing parties and a unique purchase contract for each transaction.

Generally, a lease purchase involves signing an agreement to rent a property for a specific period. It’s usually longer than one year and could be five years or more.

Essentially, the longer-term lease allows you to purchase the property before the lease expires.

The contract will include a specific purchase price, which you can exercise before lease expiration.

An advantage of a lease with the option to buy is that you can lock in today’s price on the property and purchase it several years in the future when it may be worth more. And if the property value declines, you can simply let the lease expire without ever making the purchase.

There are drawbacks too. For one, since you’ll be tying up the property for several years, with the owner/landlord agreeing to lock in the price, you may be required to make a larger deposit on the lease.

But I’ve also seen lease options that allocate a certain percentage of your monthly rent to the deposit. It’s possible that the applied rent payments will cover the entire deposit by the end of the lease term.

Risks Factors of Investing in Real Estate with Little to No Money

Person with their finger on a stack of blocks that spell out the word risk

Investing in real estate with no money is possible – but it won’t be easy!

As you can see, there are multiple ways to invest in real estate with no money. But you must be aware of the limitations that come with that strategy. Here are some other considerations you will need to make.

1. Any no-money-down investment is a high-risk proposition. Zero equity means you have zero margins for error. That can become a serious problem if you purchase a house that declines in value. Also, the more you finance, the higher your monthly mortgage payment.

2. You need an emergency fund.

If you have a property with tenants, things will break and need to be fixed or replaced. That will cost money. You’ll want an emergency fund in place upon closing to be ready for contingencies.

3. You may be susceptible to high interest rates.

High interest rates are a reality in 2022. If you purchase a home with little to no money down, you may be at risk if mortgage rates suddenly rise. This is especially true for anyone living on a tight budget who can’t afford an increase in their mortgage payment.

4. It’s helpful if you are handy.

You don’t need to be able to renovate a property by yourself. But you’ll save a lot of money if you can handle most routine repairs yourself. Otherwise, you’ll go broke paying for repairs and maintenance.

5. Always get a home inspection before you buy.

During the housing boom of 2020/2021, a lot of new home buyers skipped this step. Many markets were so hot buyers were afraid to ask for one. And many sellers were turning away offers that asked for it. It doesn’t matter how much demand there is; never skip the home inspection; it should be near the top of your home buying checklist.

A home inspection is your one and only chance to find out “what’s under the hood” of the house. Fail to get the inspection, and any undetected problems will immediately become yours as of the day of closing.

Alternative Real Estate Investments

Man in suit standing behind an investment graphic

Did you know? You can invest in real estate without owning physical property and all the risks and hassles of property ownership or being a landlord. Here are two alternative real estate investments that let you start with less than $1000.

Real Estate Investment Trusts (REITs)

REITs are kind of like mutual funds that invest in commercial real estate. When you purchase units of a REIT, you are buying a small slice of ownership in office buildings, retail space, apartment complexes, and even medical or educational facilities.

REITs are designed primarily to provide income, which is paid as dividends. They are legally required to return 90% of all net revenue to shareholders. But you also have the opportunity for capital gains whenever underlying properties are sold at a profit.

REITs can be bought and sold through investment brokers like TD Ameritrade. They can generally be purchased for one share (or less) and are usually traded as easily as stocks.

Where to Buy REITs

One of the easiest ways to get started with REITs is through an exchange-traded fund(ETF). REIT ETFs are low-cost, provide diversification across the real estate asset class, and like individual REITs, they offer attractive dividend yields. If you’re interested in purchasing REIT ETFs, I recommend M1 Finance.

M1 Finance is a robo-advisor platform that uses a pie-investing approach. You can create your own “pie” with a mix of individual stocks and ETFs. For example, you could hold 3 ETFs in a single pie, one of them being a REIT ETF. For more information, check out my full M1 Finance review.

Open an Account
  • Commission-free investing
  • Allows fractional shares in stocks, ETFs
  • Small minimum investment: $100

Real Estate Crowdfunding

Real estate crowdfunding allows you to invest through online real estate platforms. You can invest in everything from non-publicly traded REITs to individual properties. Minimum investments range between $10 and 20% or more of the down payment on an individual property.

Some real estate crowdfunding platforms require accredited investor status. That means you must show minimum income and asset levels to qualify (and they’re steep!). But there are plenty of platforms that do not require accredited status.

Real Estate Crowdfunding: Where to Invest

One prominent example is Fundrise. With as little as $10, anyone can invest in non-publicly traded REITs. They have low fees and different plan levels for investors with more capital.

Invest in Real Estate
  • Low minimum investment – $10
  • Diversified real estate portfolio
  • Portfolio Transparency

If you are an accredited investor, consider RealtyMogul. With a minimum investment of $5,000, you can begin investing in individual properties. These are some of the most profitable investment deals in the real estate crowdfunding space. Learn more in my RealtyMogul review.

Get Started with Realty Mogul

Final Thoughts

As you can see, there are plenty of ways to invest in real estate with no money. But real estate investing carries plenty of risks, especially if you buy physical real estate. That’s why it’s critical that you do the proper research upfront. Once you do, if you’re not quite ready to jump into the real estate market, consider starting with individual REITs or a REIT ETF, and build from there.

FAQ’s on Investing in Real Estate With No Money

What is the lowest you can invest in real estate?

The amount you can invest in real estate will depend on your financial resources and investment goals. Some people may choose to invest a small amount of money in real estate, while others may have the resources to make larger investments.

One way to invest in real estate with a small amount of money is to purchase a property with the intention of fixing it up and reselling it for a profit. This can be a good option for people who have some knowledge of construction or property maintenance, and who are willing to put in the time and effort to improve the property.

Another option is to invest in real estate through a crowdfunding platform, which allows you to pool your resources with other investors to purchase a larger property. Many of these platforms have minimum investment amounts, which can vary, but may be as low as a few hundred dollars.

It is also possible to invest in real estate through a real estate investment trust (REIT), which is a company that owns and operates income-generating properties. REITs are traded on stock exchanges and can be purchased in small amounts, making them a potentially accessible option for investors with limited funds.

It is important to note that investing in real estate carries risks, and it is essential to carefully consider your options and do your due diligence before making any investment. It may also be a good idea to seek the advice of a financial professional before making a real estate investment.



How do I start investing in property with little money?

Here are a few options you may consider if you are looking to start investing in real estate with limited funds:

1. Look for properties that need work: One way to invest in real estate with a small budget is to purchase a property that needs repairs or renovations and then sell it for a profit after the work is completed. This strategy can be a good option for people who have some knowledge of construction or property maintenance, and who are willing to put in the time and effort to improve the property.

2. Consider partnering with other investors: Another option is to team up with other investors to purchase a property. This can allow you to pool your resources and purchase a larger property that you may not have been able to afford on your own.

3. Invest in a real estate investment trust (REIT): A REIT is a company that owns and operates income-generating properties. REITs are traded on stock exchanges and can be purchased in small amounts, making them a potentially accessible option for investors with limited funds.

4. Explore crowdfunding platforms: Some crowdfunding platforms allow you to invest in real estate projects with a small amount of money. These platforms typically have minimum investment requirements, which can vary, but may be as low as a few hundred dollars.

It is important to note that investing in real estate carries risks, and it is essential to carefully consider your options and do your due diligence before making any investment. It may also be a good idea to seek the advice of a financial professional before making a real estate investment.

How do you invest in real estate if you don’t have money?

It is generally necessary to have some financial resources in order to invest in real estate, as most properties require a significant amount of money to purchase. However, there are a few ways you may be able to invest in real estate without a large amount of money upfront:

Consider owner financing: Some sellers may be willing to finance the sale of their property through a process known as owner financing. This means that the seller acts as the lender, providing the buyer with a mortgage to purchase the property. This can allow the buyer to purchase the property without having to come up with a large down payment upfront.

Lease option: Another option is to enter into a lease option agreement, in which you lease a property with the option to purchase it at a later date. This can allow you to build equity in the property over time and potentially purchase it in the future when you have more financial resources.




Facebook LinkedIn Twitter

About the Author

Jeff Rose, CFP® is a Certified Financial Planner™, founder of Good Financial Cents, and author of the personal finance book Soldier of Finance. He was a financial planner for 16+ years having founded, Alliance Wealth Management, a SEC Registered Investment Advisory firm, before selling it to focus on his passion - educating the masses on the importance of financial freedom through this blog, his podcast, and YouTube channel.


Jeff holds a Bachelors in Science in Finance and minor in Accounting from Southern Illinois University - Carbondale. In addition to his CFP® designation, he also earned the marks of AAMS® - Accredited Asset Management Specialist - and CRPC® - Chartered Retirement Planning Counselor.

While a practicing financial advisor, Jeff was named to Investopedia's distinguished list of Top 100 advisors (as high as #6) multiple times and CNBC's Digital Advisory Council.

Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.

Facebook Twitter LinkedIn


You Might Also Enjoy

How to Get Free Stocks: 13 Online Brokers that Offer Free Stock for Signing Up

How to Get Free Stocks: 13 Online Brokers that Offer Free Stock for Signing Up

SaveBetter Review: The Best Place to Go for High-Interest Savings?

SaveBetter Review: The Best Place to Go for High-Interest Savings?

7 Things You Need to Know About a Simple IRA for 2023

7 Things You Need to Know About a Simple IRA for 2023

Yieldstreet Review: Should You Invest In Alternative Assets?

Yieldstreet Review: Should You Invest In Alternative Assets?

Is Robinhood Safe?

Is Robinhood Safe?

17 Best Ways to Invest $2,000 to $3,000

17 Best Ways to Invest $2,000 to $3,000

Leave a Reply

Cancel reply

  • Make Money
  • Manage Money
  • Invest
  • Taxes
  • Insurance
  • Retirement
  • Banking
  • Home
  • Credit
  • Debt
  • About
  • Contact
  • Do Not Sell My Personal Information
  • Facebook LinkedIn Twitter

© 2023 Good Financial Cents®. All Rights Reserved. | Privacy Policy | Disclaimer | Licenses & Disclosures

All written content on this site is for information purposes only. Opinions expressed herein are solely those of AWM, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.

All third party trademarks, including logos and icons, referenced in this website, are the property of their respective owners. Unless otherwise indicated, the use of third party trademarks herein does not imply or indicate any relationship, sponsorship, or endorsement between Good Financial Cents® and the owners of those trademarks. Any reference in this website to third party trademarks is to identify the corresponding third party goods and/or services.