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How to Buy a Rental Property with No Money in 2024

Learn the best ways to buy a rental property with little-to-no money this year.
Learn the best ways to buy a rental property with little-to-no money this year.

Investing in real estate with no money can be challenging, but there are several strategies you should consider if you want to give it a try.

This article discusses several ways you can get started with rental property investing with little-to-no initial capital. 

From wholesaling and seller financing to crowdfunding and joint ventures, you’ll learn how to buy a rental property with no money and get your real estate investing career off the ground this year.

Understanding “No Money Down”

What does "no money down" actually mean?
What does “no money down” actually mean?

As the name suggests, no money down real estate investing is a strategy that involves acquiring property without putting a significant amount of your own money into the deal upfront. 

Instead of using your own funds to cover the purchase price and associated costs, you leverage creative financing techniques to minimize or eliminate your initial investment. 

Benefits of Buying a Rental Property With no Money

Learn the benefits of buying a rental property with no money before getting started.
Learn the benefits of buying a rental property with no money before getting started.

Buying a rental property with no money down can offer several potential benefits, although it’s important to note that these benefits come with their own set of risks and challenges. 

Here are five potential benefits of pursuing this strategy:

Low Startup Costs

The most obvious benefit of buying a rental property with no money down is that you don’t need to invest a significant amount of your own capital upfront. 

These low startup costs can free up your personal funds for other investments or expenses, allowing you to diversify your investment portfolio.

Increased Cash Flow Potential

Since you’re not putting your own money into the property, your monthly mortgage payments and operating costs may be lower. 

This can potentially lead to higher positive cash flow, where the rental income exceeds the expenses associated with the property. 

A positive cash flow property can contribute to your passive income stream and boost your revenue potential.


No money down real estate investing relies heavily on leveraging other people’s money or creative financing techniques, which can amplify your potential returns. 

If the property appreciates in value over time, the return on your initial investment (which was minimal or nonexistent) can be substantial.

Opportunity to Enter the Market

For individuals who don’t have substantial savings but want to get into the real estate market, a no money down strategy can provide an entry point. 

It allows you to start building your real estate portfolio and gain experience as an investor without saving for a large down payment.

Risk Sharing

In scenarios where you partner with other investors or secure financing from sellers or private lenders, you’re sharing the financial risk. 

This can provide a safety net, especially if the property’s performance doesn’t meet your expectations.

Drawbacks of Investing With no Money Down

It's also important to understand the risks of investing in real estate with little to no money.
It’s also important to understand the risks of investing in real estate with little to no money.

Investing in real estate with no money down can sound appealing, as it potentially allows you to enter the real estate market without a big financial commitment.

However, there are several significant drawbacks and risks associated with this approach:

Higher Interest Rates

When you put down a larger down payment, lenders see you as less risky because you have more of your own money invested in the property. 

With no money down, you might be perceived as a higher-risk borrower. As a result, lenders could offer you a mortgage with a higher interest rate to compensate for the increased risk. 

This higher interest rate can significantly impact your overall borrowing costs over the life of the loan.

Private Mortgage Insurance (PMI)

A down payment of less than 20 percent will likely require you to pay private mortgage insurance (PMI) to your lender.

PMI is a way for the lender to protect themselves in case you default on the loan, and it doesn’t benefit you as the borrower. 

» MORE: Learn More About PMI

Limited Cash Flow

Investing with no money down usually means higher monthly mortgage payments. 

This can lead to reduced cash flow, which is the amount of money left over after deducting operating expenses, mortgage payments, and other costs from the rental income. 

If your cash flow is limited, it becomes challenging to cover property management expenses, repairs, vacancies, and other unexpected costs that might arise.

» MORE: 7 Tips for Rental Property Maintenance

Negative Equity Risk

One of the significant drawbacks of investing with no money down is the risk of negative equity. 

If the real estate market experiences a downturn and property values decline, you might find yourself in a situation where you owe more on the mortgage than the property is currently worth. 

This situation can make it challenging to sell the property or refinance, as lenders might be hesitant to work with you when you have negative equity.

Limited Financing Options

Finding lenders willing to provide no-money-down financing can be difficult, especially in a tighter lending market. 

Limited financing options can make it harder to secure a mortgage with favorable terms. It could also limit your ability to negotiate and potentially force you to accept less favorable conditions.

6 Ways to Buy a Rental Property With no Money

Explore your options with creative financing before making your decision.

After considering the pros and cons of buying a rental property with no money, it’s time to get started and find your first deal.

Here are just a few of the most popular methods to get started with:

Networking and Partnerships

Networking involves building relationships with potential investors, lenders, and partners who have the financial resources you may lack. 

By demonstrating your knowledge and dedication, you might find someone willing to provide the necessary funds in exchange for a share of the property’s profits. 

This could be a partnership where you handle property management and operations while your associates provide the capital and real estate expertise.


In real estate wholesaling, you find a distressed property at a significantly discounted price and put it under contract. 

Instead of purchasing the property yourself, you assign the contract to another investor for a fee. This allows you to make money without needing your own funds or credit. 

Essentially, you’re acting as a middleman connecting motivated sellers with other investors.

» MORE: How to Make $10,000 Per Month Wholesaling

Joint Ventures

A joint venture involves partnering with another investor who provides the capital, while you bring your expertise in identifying and managing properties. 

The profits from the joint venture are typically split according to the terms of the operating agreement signed before the venture launched. 

These arrangements can be flexible and often involve different levels of involvement from both parties.

» RELATED: Components of a Short-Term Rental Agreement?

Seller Financing

In a seller financing arrangement, the property owner acts as the lender, allowing you to make payments directly to them instead of a traditional bank. 

Terms such as the interest rate and repayment agreement are negotiated between you and the seller in a seller financing deal.


Crowdfunding platforms allow many different investors to pool their money together to invest in real estate. By contributing a smaller amount of money, you can become a partial owner of a rental property. 

This approach opens up real estate investing opportunities for people with limited capital. However, the returns on crowdfunding platforms tend to be smaller than other types of real estate investing.

Subject-To Deals

In a subject-to deal, you purchase a property “subject to” the existing mortgage. This means you take over the seller’s mortgage payments while legally owning the property. 

Subject-to deals allow you to acquire a property without getting a new loan, making it a no-money-down strategy. However, it’s crucial to ensure you’re in compliance with all legal and ethical considerations.

» MORE: Learn More About Subject-To Investing

Additional Ways to Invest in Rental Properties with No Money

Learn the basics of how to invest in rental properties without having an exorbitant amount of capital on hand.

If the above investing methods aren’t feasible for your personal situation, there are a few other options you can try.

Lease Options

A lease option involves two agreements: a lease agreement and an option agreement. 

As the investor, you lease a property from the owner and negotiate the right to buy the property at a predetermined price within a specific timeframe.

During the lease period, you can sublease the property to a tenant and potentially generate rental income. 

If property values rise during the option period, you can exercise the option to buy the property at the agreed-upon price, securing potential profit.

House Hacking

House hacking is a strategy where you purchase a property, typically a duplex or tri-plex, and live in one unit while renting out the others. 

This approach allows you to generate rental income that can help cover your mortgage, property taxes, and other expenses. 

House hacking works particularly well for individuals or families looking to reduce their living costs while building equity and gaining experience in property management.

» MORE: 5 Tips on Successfully Renting Out Your House

Sweat Equity

Sweat equity involves investing your time, skills, and labor into a real estate project in exchange for ownership or a share of the profits. 

For instance, you could partner with an investor who has the financial resources but needs someone to manage renovations, repairs, or property management tasks. 

Your contribution adds value to the property, and in return, you gain a portion of the proceeds when the property is sold or rented.

Real Estate Investment Trusts (REITs)

REITs are publicly-traded companies that manage commercial real estate properties across various sectors in the economy. They most often own and operate office buildings, apartment complexes, industrial properties, and more.

Investing in REITs means you’re buying a stake in the company, giving you exposure to real estate assets without directly owning properties. 

This allows you to participate in real estate’s potential for income and long-term appreciation without the responsibilities of property management.

» MORE: Best REITs to Invest in for Beginners

Final Thoughts

Overall, buying a rental property with no money can be difficult at first. Just because you don’t have millions to buy an office building in Lower Manhattan doesn’t mean you can’t invest in real estate. 

It’s always a good idea to get experience in low-risk real estate investing before moving on to bigger projects with higher returns down the line.

Related: Do You Need an LLC for Rental Property Investing?

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