How to Invest in Real Estate With No Money

Investors do not need tens of thousands of dollars to put into real estate. REIT shares and crowdfunding platforms require only $5 to buy in. Property owners can also increase the value of their home or take out a loan that can go toward a separate investment.

Investments seem like a game for polished men in suits who are ready to open their briefcase and order a steak dinner. They can afford to lose thousands of dollars in the stock market because they have tens of thousands more in other investments.

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But even college students and people who are living paycheck to paycheck have the ability to put some money aside and watch it grow over the course of 5, 10, or 20 years. If you are 18 years old and want to afford a house by the time you are 30, all you have to do is invest some birthday money here and there and forget about it for a few years.

The sooner you begin investing, the more you will get out of your efforts. Trust us, you won’t have to rent an apartment forever. It may require some research, but once you find the shares that you want to buy, all you have to do is click a button.

Low-cost opportunities are not always easy to spot in a world of mutual funds that want a $10,000 minimum investment. Don’t let high stock prices or accreditation requirements discourage you. We’ll show you some of the best ways to invest in real estate with little to no money.

Why should you invest in real estate?

We don’t have to go into the importance of investing your money right now – you probably know that already.

First-time investors usually look at two choices when it comes to investments: real estate and stocks. Do you want to put your money into a beautiful new home, live out your HGTV fantasy with a fixer-upper, and invest in projects that will benefit your neighborhood…or play the stock market game?

We will provide more in-depth information about the real estate vs. stocks debate, but for now, just know real estate has some definite advantages over stocks:

Real estate is always appreciating in value.

No matter what happens to your property or your neighborhood, your home and land will always be worth something.

The guaranteed value of real estate stabilizes the market more than, say, the stock market. The low risk may reduce your potential for high returns but provides reassurance that you will see some type of return if you put money into your investment over the next five or ten years.

Plus, if you decide to invest by buying a second home or vacation home, you will be able to actually enjoy your investment! Many investors love that they can physically see, change, and use their investments.

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Real estate offers many different options. Investors can hold a diverse portfolio even if they just invest in real estate. If you want passive income, long-term growth, or to physically hold property, you can achieve all of these goals with real estate investments.

Real Estate Investments That Require Little To No Money

Ready to dive into the world of real estate? All you need is $5, but we recommend putting a hefty chunk of change aside when you are ready to invest. A single share of a REIT worth $5 will not have you swimming in millions within five years. The more you put into your investment, the more you will get out of it.

Where will you put your investment? Let’s look at some more accessible options.

Real Estate Investment Trusts (REITs)

How much money do you need?: $5

Real estate investment trusts (REITs) take money from a group of investors and put that money into different real estate holdings.

Investors can put money behind publicly traded REITs or private REITs, although publicly traded REITs are usually more accessible for first-time investors. You can buy shares in REITs on the stock market like you would buy shares of any other company.

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REITs must give 90% of their returns back to investors; this is a great way to benefit from your investment in the short term, but you will also have to pay taxes on these returns.

Real Estate Mutual Funds

How much money do you need?: $100

Real estate mutual funds are essentially a bundle of real estate securities purchased through a group of investors. Mutual fund managers pick the securities that they want to invest in and their overall strategy for what to do with returns. Since managers can use returns to invest in other securities, investors may not see big returns every quarter – but they will see their investment continue to grow (and save money on taxes.)

Investors only need $100 to buy into the Schwab Global Real Estate fund. This mutual fund invests 80% of its net assets and can be a great starting point if you want to put away money for the future.

Real Estate Crowdfunding

How much money do you need?: $5

Real estate crowdfunding is the new, hot way for accredited and non-accredited investors to pool funds and contribute to real estate projects. As of 2016, non-accredited investors can put their money into sites like Fundrise or Realty Mogul and start to make passive income. Real estate crowdfunding platforms invest in REITs, individual project, mutual funds, or 1031 exchanges.

Fundrise, one of the hottest crowdfunding sites on the market, requires an investment of $500. Sure, this is “no money” to some, but if you really have no money, you still have options. Rich Uncles, another popular crowdfunding site, requires only $5 for your initial investment. Most platforms set minimum investments based on the type of investment (individual project, REIT, etc.)

Renovations to Increase the Value of Your Current Home

How much money do you need? Just a little homemade TLC will do!

If you already have real estate, you have invested in real estate.

Consider your home in your overall investment plan. If you have rooms to rent out, for example, you can start earning supplemental income and save up for separate investment.

Homeowners can also use the value of their home to get cash for future investments through a HELOC or home equity loan. Even if you don’t apply for a HELOC today, you can take some simple steps to increase the value of your home. These steps can also ensure that you get the most out of your home if you decide to sell and purchase an investment property later on!

Here are some simple ways to increase the value of your home:

  • Tidy up your front lawn and plant flowers to add curb appeal
  • Give your walls a fresh coat of paint
  • Replace old appliances or bathroom features
  • Remodel one of your rooms

Even if you aren’t ready to rent out a room or sell your home today, these investments will help to make your day a little brighter. (Installing a brand-new shower, for example, will increase your home’s value and immediately pay off.)

We know, we know, a fresh coat of paint or a new shower head won’t appear out of thin air. But if you have some equity on your home or just have minor expenses in mind, you can qualify for loan programs and refinancing options that will give you what you need to renovate.

Pay Off Your Mortgage

How much money do you need?: Anything you have!

If the idea of calling a repairman leaves you grumbling, know that you can direct your funds toward paying off your mortgage for a similar effect. Putting more money toward your mortgage allows you to get a higher home equity loan, HELOC, or cash-out refinance for lower rates.

Property owners who have been paying off their mortgage for a number of years may also be able to refinance their mortgage and pay it off sooner. Explore refinancing options with a financial adviser and check to see if you qualify for lower interest rates that will free up some cash.

If you have other debts, consider putting a little extra money toward those payments as well. The sooner you are free from student loan debt or credit card debt, the sooner you will have more money to invest.


How much money do you need?: None!

If you want to start flipping properties without money, you have options. You don’t even need a loan or a real estate license. Many real estate investors are starting to play the wholesaling game. Newbies are finding that they can make a livable salary off of this strategy.

If you have been to a Sam’s Club or a Costco, you know how wholesaling works. Companies produce items in bulk to lower the costs for each unit. The company can then sell each unit for competitive prices and still make a profit. Everyone wins, right?

Real estate wholesaling applies this process to building or buying houses in bulk. Property owners can get each unit for a cheap price, “flip” the property with typically minor fixes, and resell each individual unit for a nice profit.

So we may have lost you already. If you don’t have enough money to buy one house, much less buy bulk real estate, you can still make money by wholesaling. It doesn’t require any money to “flip contracts” and connect sellers and buyers.

Wholesaling requires more than putting some money into the market and watching it grow over the course of a few years. For many, it is a full-time job, but a fulfilling one.

Investing in Real Estate With No Money Down

All of these options may come as a surprise to you. When you read about investing in real estate, you are most likely reading about buying up property, “flipping it,” or renting it out to tenants for a price that will cover the costs of maintaining that property.

Is playing “Fixer Upper” still an option if you don’t have any money?

On first glance, chances may seem slim. Not every first-time investor has a few thousand bucks lying around for a down payment, closing costs, and other expenses that will get your investment on its feet. This can be discouraging, but don’t let these numbers crush your real estate dream yet.

If you want to buy a house with no money down, explore the following loan programs that offer 100% financing:

USDA Loans

The United States Department of Agriculture (USDA) has a special loan program for low- to moderate-income families who want to purchase property in a rural area. (You might be surprised to see that the USDA still considers your neighborhood to be “rural.” Most areas in the US qualify for this loan.) Borrowers do not need to put up a down payment if they qualify.

FHA Loans 

The Federal Housing Authority (FHA) requires only a 3.5% down payment for borrowers who have a 580 credit score or higher. Borrowers do not have to scrape up this down payment themselves; the FHA allows borrowers to use gift funds to cover 100% of the down payment. Family members, friends, or companies can provide these gift funds. Borrowers can also seek financial assistance from a separate lender to cover their down payment.

Conventional 97% LTV Mortgage

Is 3.5% too much for you? Try a 97% LTV mortgage from a conventional lender. This program requires a 3% down payment. Like the FHA, you will be able to use gift funds or third-party financing to cover the down payment.

VA Loans

Veterans, service members, and their spouses have a lot of opportunities for finding loans with 100% financing. Many VA loan programs do not require a down payment or a high credit score.

In general, if you don’t want to put money down on your house, you will have to have a high credit score and may pay private mortgage insurance down the line. If you want to secure a loan with no money down some time in the future, it may be wise to put some extra money toward paying off your debts today.

Real Estate Investments Are Not a One-Time Purchase

When you look at the projected returns after 10 or 20 years, you might be amazed by the numbers – until you see that the initial investment was $10,000. The price tags for initial investments seem tempting, but even as you see annual returns, you may have to pay annual fees.

Before you make your initial investment, make a short-term and long-term plan. Ask yourself the following questions:

How often (and how much) can you add onto your current investment?

At one point will you feel comfortable letting your investment sit and diversifying your portfolio?

How do you see yourself using the money earned from your investment? How much will you need?

If you are adding value to your home and want to eventually sell it, when do you want to sell?

Investing in a REIT or a mutual fund certainly does not require as much maintenance or attention as physically purchasing real estate, but if you are doing so with only pocket change, it is important to remember your investment and keep nurturing it until you have a few thousand dollars put away.

Of course, don’t take our word for it. Every investment strategy and financial situation is different. If you are shopping around for real estate, reach out to a real estate agent who can help you gauge the value of homes in the area and whether now is a good time to invest. Financial advisers can also help you determine which investment strategies are best for your short-term and long-term goals.