How do I start with no money down?

Question

Hey I'm 20 years old. I'm not going to college. I have no money in my savings. But I really want to get into real estate. I find it very exciting! What is a good way to start investing with no money down? I'm interested in buying duplex's or triplex's. Should I start with a single family home? Is there step by step instructions I need to follow? What problems will I encounter and how do I overcome them? I know i'm asking so many questions, but I'm hungry for knowledge!

Jay Hinrichs · Answer

forget about investing until you have capital the no money down and have no money is just bunk you will waste an inordinate amount of your time

you want in real estate.. study real estate get a license then get an intern ship with a good RE company so you get paid to learn or go to work part time with a top producing agent. .whatever you do learn the craft and do =something that makes you money first.. then when you get some capital and reserves then start investing..   OPM is great for those already established .. but it does not mean they HAVE ZERO liquidity... those that talk about no money to get into real estate I think paint a very delusional picture of reality of the industry as a whole.

Michael S. · Answer

Welcome to BP @Erick Sanchez Check out Brandon's book on Investing with no or low money. It will give you a lot of ideas on creative financing

Mindy Jensen · Answer

@Erick Sanchez , building off Jay's advice, with no money, how would you pay for repairs on a property?

Say you are able to use a strategy to purchase with no money down - like selling financing where the person selling the property holds the note and you make payments to them. You own the triplex, and the furnace goes out. How do you repair it?

The good news is that you can start saving for a down payment, while educating yourself about real estate investing. What is your job right now? Do you have any way to increase your earnings at your current job? If not, can you change jobs to make more money? Can you get a second job or a side hustle in order to bring in extra cash? Do you own anything of value that you could sell?

Matt Lowery · Answer

Welcome Erick! The good news is that you're here, so you've already started.I agree with Victoria's advice. Kansas has a first time home buyer grant that can cover all of your down payment on an FHA, sometimes more. Send me a message and maybe we can get together and talk about what you're wanting to do. I'm starting to do a little more over the next couple weeks in our area, so maybe there's a good fit to work together.

Account Closed · Answer

Erick,

I am also 20 years old but my situation is a little different. I joined the Air Force with no money saved but I have learned to budget and live frugally, allowing me to save money much faster. Where I am stationed in North Dakota, the market isn't very big and was hit hard a few years ago when the oil industry slowed down rapidly, so I have decided not to invest here but to continue to save as much as I can while I am here and educate myself on REI in order to take action when I am ordered to move to a new location unless I go overseas, then I will wait till my enlistment is up in a few years and start then.

If you need any recommendations for books or videos or just have a question, please message me. I may not have any experience yet but I have a little bit of knowledge that might help out.

David Faulkner · Answer

One additional option ... you could work in the industry and earn while you learn. The most common and in many ways very effective way to do that is to get your RE license and start working part or full time as a real estate agent. No college degree required, just a lot of hard work and determination.

Erick Sanchez · Answer

Mindy Jensen, I will find a way. Time is on my side. I'm not trying to get rich QUICK. I will find a way to save money. I work at a Distribution Center about an hour away from home. I've been listening to podcasts on the way. I don't care if it takes me a year, two years, even 10 years. I will become financially free and I will keep learning.

David Faulkner, I started learning about RE a month ago. I'm now starting to save up. I used to spend spend spend on useless things. But now I've created a budget and I'm trying to save as much as I can.

Jeff B. It isn't a dream path. It's been done before, I don't accept a no for an answer. "you can't do that" oh yes I can :) I don't agree with the "..if one can't make a reasonable down payment.."

Mark Nolan, Thank you! I'm glad I found this website. I've learned so much by listening to the podcasts!

Jared Samsel, Good look man! I'll pm you

Mark Nolan · Answer

@Erick Sanchez

Welcome to Bigger Pockets. Make sure to listen to the podcasts. They are very informative, and contain ample information. https://www.biggerpockets.com/blogs/

Jeff B. · Answer

Frankly, anyone attempting to go down this dream path of "no money down" is kidding themselves.  This isn't the way the world works.  Even 100% seller financing would require something down.  The decades old Lay-Away plans are gone too (pay $10 a month until it's paid off and then take possession).

It should be clear that if one can't make a reasonable down payment, then they can't pay a mortgage or property taxes and the maintenance would still be in question too.

Go down to a used car lot and offer no money down and see what ringers you get pulled through. (btw: the repossession rates on these is sky rocketing).

As we said after Jonestown, "Don't drink the cool-aid"

How do I start with no money down?

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