Asked by Joyce  |  Submitted July 18, 2014

How can I get started investing in real estate with no money?

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  Answers  |  1

July 18, 2014

Hi Joyce:

First, it's very nice to be able to answer a question for someone right here in my backyard (DC)! Real estate investing can be both very challenging and very rewarding. Realize that it is not as easy as it may appear in those shows on HGTV, or on countless infomercials circulating the airwaves. That said however, when it is done right, with the proper strategy, support partners, and business plan, it can create quite a wealth portfolio.

What I can answer for you relative to "no money down" is the perspective from mortgage lending. The short answer is that it simply doesn't exist; that is to say that (conforming agency / Fannie Mae, Freddie Mac) mortgage loans for residential investment properties always require a down payment anywhere from 20% to 30%. However, there may be other non-agency portfolio mortgage programs that will allow either a lower down payment or no down payment. Of course besides your down payment however, you need to be concerned with closing costs when purchasing a property.

One recommendation I can make for real estate investing with no money, is a rent-to-own proposal. You can read more about this online, but the basic idea is that you will rent a property for a period of time, and your rental money will go towards the purchase of the home. Whether or not it will require any money from you at the time of purchase will greatly depend on the structure of how this is set up with the owner of the property.

I hope this helps.

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