Are Low/No Money Down Real Estate Deals Actually Viable?

[Ken Almira]

Hey everyone,

I recently saw a post from someone asking how to invest in real estate with $25K, and most responses suggested that it's not enough and that putting it into an index fund would be a better option.

This got me thinking—are the low or no money down strategies I hear about actually viable? Do experienced investors use them successfully, or are they more of a gimmick?

If these strategies do work, what types of deals or financing methods are commonly used? Are they realistic for someone just starting out in REI like me, or do they come with major risks that aren't always talked about?

Would love to hear from experienced investors on whether these approaches are worth pursuing or if having more capital upfront is truly necessary.

Thanks in advance for your insights!

[Patrick Roberts]

Generally, the only widely available pathway into RE investing with low cash is via househacking where you get a primary residence loan with a very low downpayment. Most on-market purchases with a Conventional or DSCR loan will require 20%+ down. There are lenders who will do 15% down, but the terms will make the loan impractical in the vast majority of cases.

BRRRR is doable to recycle your cash, but you have to find a really good deal (hard to do right now) and will still need 10%+ on acquisition using hard money in most cases. Having a PML who will give you sweetheart terms can make this easier.

In short, there are select cases where an experienced investor with a strong network can turn deals with low cash, but someone trying to get started with $10k-$20k is going to have a very hard time.