How to buy a house w/o no money

Question

Anthony Micklus · Answer

Ok I have to weigh in on this. Can you get started in real estate with NO money. Absolutely not. That is not to say you need money to buy the houses but you do need money for marketing.

A very popular way of getting into real estate is wholesale buying. Essentially you go out and find a deal get it under contract and sell that deal to investor for an assignment fee. Assuming it is legal in your state (it is not in mine.) you are still going to need at least some money for marketing and advertising.

Another way to get into real estate with "little" money down is to find a multi-family property in your area. As long as it is less than 5 units there are 0% down FHA loans out there. The catch is that you need to live in the property.

Lastly if you can find the right seller sometimes the seller will finance your mortgage.

In Real Estate you need Knowledge, Time and Money. Unless you possess at least two of the 3 and can find someone with the 3rd you are probably not going to make it.

Adrian Chu · Answer

Connect with a BP member in your area and learn as much as you can!  Best of luck.

Dev Horn · Answer

@Jalen Thompson

Way to get started early!  I can feel your enthusiasm!  Jalen, I have a 3-video course on wholesaling (our "Wholesale Accelerator" course) that I give free to my colleagues on BP.  The course takes you thru the entire process, beginning to end (and it includes sample contracts).  Send me a colleague request with your EMAIL ADDRESS and I'll shoot you an email with the video links & contract attachments.

Wishing you much success!

George C. · Answer

Jalen,

It can be done, I did it when I was 22.

Background; (1990) My father owned a 2 family, one unit had a relative living in it, the other a friend of the relative. My Dad had retired and moved across the country, so he was not hands on. I was young and doing construction/contracting work and living in the area, so I would fix anything there that broke.  The relative was constantly late with the rent, so my father in his less than infinite wisdom let them pay the mortgage directly to the bank, being that it was the same amount as their rent. They would have till the 15th to do it with out it being late. Yup, bonehead move on Dad's part.

*Jalen, never rent to friends or family*

Everyone knows what happened, right??? Relative didn't pay the mortgage for three months in a row, My Dad had no clue, this was 1990 before computers and instant info. Dad gets a letter in the mail one day from the bank telling him that they are foreclosing on him if he doesn't come up with the arrears & costs. He didn't have that money being newly retired. Of course relative doesn't answer the phone, etc...

I'm 22, working with no credit and nothing to show, my soon to be wife (getting married in 4 months) had been a RN nurse for less than a year but had provable income, but no credit. We wanted to buy the house because my Dad wanted out, couldn't deal with it, and being so far away.

I talked to a friend of mine and he told me to go to this local mortgage company that he dealt with. I went there and told the loan agent exactly what the deal was. she ran our (my girl's & my) credit and was like you have none. She said that we wouldn't qualify on our own. She said that they would refinance the amount we wanted to buy out my Dad, but he would have to be on the mortgage and be an owner to get it done, being that he had good credit ( the recent problem explained to them). *She said*, wait a few months after the loan closed and have your Dad sign over a deed to just the two of us, he gets his money & you two get the house. He just has to stay on the mortgage for a while, you could always refinance in two years and get him off. So that's what we did.

We were 22 and owned a 2 family house within 10 minutes of NYC, we got it for no money down & no credit of our own.

Oh but the family drama that went on after that, how cold hearted I was for kicking them to the street with a baby and all, never mind they cost my father part of his retirement income forever & their friends in the other apt created problems till they got out the next month.

Could this be replicated with a stranger-seller? I bet you could, it's kind of like buying subject to the sellers old mortgage. If they are desperate to get out and want to save their credit instead of walking away from it, they might be willing to refinance *with you* and give you the reins with the stipulation that you be able to refinance later and get them off the mortgage too.

We had one closing but two deeds, one for Dad granting us equal share that was filed at closing, one signed & legal giving us Dad's share, just filed two months after the mortgage closing.

Bill Bodziak · Answer

Hi Jalen,

Sure there are ways to buy with $0 but it will take work and usually pretty good credit, solid job history, or private money (family etc).  There is tons of great info on BP so your joining is a great start! Listen to the podcasts and check out the forums daily and I am sure you will find exactly what you need to get the ball rolling....

P.S. Redford is a decent market to get started in....good deals can be found relatively easily and the retail market is pretty strong....

Good Luck!

Zachary Gwin · Answer

Hey @Jalen Thompson,

Welcome to BiggerPockets man.

It's very very very hard to invest with ZERO cash at hand. Im currently going through this right now. I've been advised as I will advise you, save at least $5,000, establish a good line of credit, make sure all of your financials are straight, and keep learning as much as possible.

I'm extremely eager to start investing as I'm  sure you are too, but going into such a business without being completely ready can hurt you.

For starters I would consider checking out the book Investing in Real Estate With No (and Low) Money Down by BiggerPockets Brandon Turner. It's great.

Good luck man! Keep us updated and ask if you have any questions!

-Zach Gwin

Joshua Woolls · Answer

Well, if you are really ambitious and you have no money you could start walking neighborhoods and knocking on doors. And if you want to purchase with no money, you could find the right house in the right situation and purchase subject to.

I absolutely agree with what you are saying though. I just wanted to point out to ScottK that it is silly to say that you need money to purchase a house. Especially to say it like he did.

Jonathan Perez · Answer

Hey Jalen, welcome to the site. Check out the blogs written on wholesaling, there are plenty on here. Some of which might answer your questions.

Here's one I found that might help:

http://www.biggerpockets.com/renewsblog/2010/2/11/...

Wish you well.

Walker Seid · Answer

Get a usda loan no money down. I'm not sure if you can buy multi family that way. You will need to research it.

Joshua Woolls · Answer

There are absolutely ways to buy houses with no money. Why would you ever act like there are not.

How to buy a house w/o no money

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