To many, it seems like there’s no way you can get started flipping houses without at least a little money of your own.
True, whether it’s buy and hold real estate investing, flipping houses, or any other kind of real estate investing, it is a lot easier to do it with money than without. There’s no doubt about that.
However, flipping houses with no money is not only possible to do, but it’s not as hard as you might think. In fact, there’s no “hidden secret” to investing in real estate with no money of your own. All it takes is a little bit of hutzpah, some courage to get out of your comfort zone, and a simple understanding of how to start and where to look.
How to Flip Houses With No Money Down: The True Story
If you’re not familiar with how it works, flipping houses with no money involves using other people’s money (called “OPM”) to fully finance your deals. The investor lends you money to purchase and fund the rehab of the property, and you pay them interest on the money they lend.
So where do you find OPM?
There are lots of places to look when you want to invest with no money down, but here’s a starter list to get you going:
One of the simplest ways to get started investing with no money is to get a partner who has money to invest. This partner could be a close friend, a business associate, a co-worker, a relative, a business owner, or even another real estate investor.
If you can’t think of anyone off the top of your head, then start thinking about the people you see on a regular basis. This may include:
- Anyone in your neighborhood who has a successful business
- Your doctor or your dentist
- Your attorney
- Anyone who invests in the stock market
The simplest arrangement in a partnership is for you to ask the partner for the money to finance the deal and for you to do all the legwork to make it happen. In this simple arrangement, you’ll do everything related to the flip, but the two of you will split the profits 50-50.
Related: 3 Ways to Fund Your Very First Flip
In essence, your partner reaps the financial rewards of the deal by chipping in the money, but not the time.
When you first get into flipping houses, it may be tempting to create a formal partnership with someone to start. Although this may seem like a good idea, you should probably hold off for now.
What you’ll soon find is that although there are a lot of great real estate investment partnerships that have succeeded wildly, there are just as many bad ones that have ended up in pure misery. When you’re first starting out, it’s best to stay independent and do your partnerships one deal at a time.