Is it possible to invest in real estate with no money at all?

Question

I’m a broke college student and I’d like to buy and sell without dad’s money.

My sister tells me it’s rare that I’ll succeed.

Is she wrong?

Ibrahim Yamini · Answer

@Martina Viteri

If you’re a college student, can I assume that you’re young?  Maybe early 20s?   If so, you have time, don’t rush it.  My advice would be to focus on educating yourself about real estate and financing options first.

You need to figure out what your strategy will be and there are 3;

Are you going to flip?

Are you going to buy and hold?

Or are you going to Wholesale?

It sounds like wholesaling will be your best option since you basically find houses for investors and they pay the difference.  Doesn’t really require any investment money on your part.

Imagine you find a distressed property owner, Divorced, inherited a house they didn’t want, about to be foreclosed on or whatever and they have to sell a house quickly.

This person wants to sell the house for $120K and you manage to talk them down to $100K.  You then get a document saying that they’ll be and “end buyer”.  The seller doesn’t need to know what the end buyer will pay, but you can let them know another buyer will be coming.

In a nutshell, you sell to the “end buyer” the house for $120K.  The end buyer ends up paying the $100K to the seller and $20K goes to you.  There’s more to it, but that’s pretty much wholesaling in a nutshell.

It may seem wrong, but you did manage to get the seller out of a bad situation.  It also works the other way.  You can agree to the original $120K and convince the “end buyer” to pay $140K.  Either way you walk away with $20K.

NOTE:  THIS IS NOT EASY!! Don’t let people convince you it is.  It requires a lot of hard work, phone calls and dedication.  You MUST educate yourself before jumping in and make connections.  Get on LinkedIn and create a business profile.

I recommend this book:

“If You Can’t Wholesale After This, I got Nothing For You” by Todd M. Fleming on Audible.

If you can scrape up $16 a month to pay for audible, I recommend you do so and get as many books or real estate so you can learn as much as possible in a short amount of time.  I learned a lot more using Audible in a year than I would have if I had paper copy books, but that’s just me, we all have different ways on how we learn.

You have to think of it like an Investment in yourself.

Are you worth $200?

$192 a year is a small price to pay for a lifetime of knowledge.

I hope this helps!

Jim K. · Answer

No, your sister is not wrong. On the other hand, I've done pretty well for myself but I would switch places with you in a heartbeat if you're, what, the 20-25 year-old you sound like, and I could stay married to my wife.

The right book for you to read right now was written by the CEO of this website, @Scott Trench. It's called Set for Life. I could spend a few days writing to you about this, reflecting on my own regrets of the past twenty-five years and how I wish I could go back and do what Scott Trench suggested, but you need the book more than you need me talking about the book.

Dave E. · Answer

@Martina Viteri

Is it possible to invest in real estate with zero of your own money, sure.

Is it easy, absolutely not. It takes a ton of hard work and hustle. Plus it is difficult to build credibility when you don’t have any skin in the game.

People have done it for sure, but more have probably failed than succeeded IMO.

So prove her wrong.

Corey Frank · Answer

@Martina Viteri I am trying to do the same thing... kind of... I have a chunk of cash but want to leverage it more as collateral for a zero down deal. There are so many recourses on this topic. Books and people on these forums are a great start. Not sure what your knowledge is on real estate but if you have no knowledge and no money, you need to fill one of those gaps. Perhaps get work experience for a contractor so you know the renovation process. Get your real estate license to learn the in and outs of how properties sell. Anything is possible. its just how much work you are willing to put in.

Eric James · Answer

I understand. People can have temporary circumstances that break them. But those with the self control and financial sense come back. Once you get out of college you won't be broke for too long.

Martina Viteri · Answer

@Eric James

That is not why I am broke at all but I understand your point.

Eric James · Answer

It's possible, but you're not likely to have long term success that way. The thing is, people are broke for a reason. They lack self control and make financially unsound decisions. That is why people who have no cash are not successful in real estate.

Ryan Tessier · Answer

@Martina Viteri

If you’re 19 you’re in a good position. But I wouldn’t expect a bank or a partner to finance 100% of your deals since you wouldn’t have a lot of experience, skills, or connections to bring to the table. (As a first time homebuyer FHA will finance up to 96.5%) on up to four units however) I think what’s most important for you right now would be to become financially savvy and learn to budget and save the money you do make now, so in a year or two you’ll have enough for your own down payment. These skills will also be immensely valuable when you manage your own finances for your rentals as well. I was able to buy my first three family at 20 by doing just this and working a construction job out of high school and saving everything I could for two years.

Best of luck in investing.

Martina Viteri · Answer

@Jim K.

Thanks for the suggestion,

I will get the book.

Martina Viteri · Answer

@Ibrahim Yamini

Thanks for the suggestion!

I’m 19 years old so I got some time, but I will definitely look into that audio book.

Is it possible to invest in real estate with no money at all?

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