How to Start Investing in Property with No Money

Written by judith alice
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How to Start Investing in Property with No Money
Profit from real estate without using your own money. (Jupiterimages/Comstock/Getty Images)

Investing in property is a great way to make money. Over the long term, property tends to increase in value while providing stable income in the meantime. With a little business savvy, it is possible to invest in property starting with no money. The primary way to start investing with no money is to use other people's money. Done wisely, you could potentially make more than 100 per cent on your investments.

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  1. 1

    Check your credit score. Your credit score will determine if you're able to borrow money at a good rate or bad rate. Ideally, you want to borrow at the lowest rate possible. The higher your credit score is, the lower the rate will be on your loan and the more money you can use for investing.

  2. 2

    Find a Realtor. A Realtor will help you through the negotiating and buying process. Realtors will usually help you find a property at no cost to you. They get paid by collecting commission from the seller when the house is sold.

  3. 3

    Compare private loan rates. Compare the loan rates from the local banks around where you would be investing in property and try to find the best rate possible.

  4. 4

    Apply for the loan. Go to the bank and fill out an application for a private loan. Once approved, keep the loan money in a special account for investing. This money will be used as a down payment and for closing costs associated with the investment property.

  5. 5

    Apply for a mortgage. Again, search the local banks for the best rate and then fill out an application. While completing the application, make sure to tell the loan officer the exact dollar amount you plan to put as down payment. When the application is complete, the bank will give you a pre-approval letter that states how much money they will let you borrow.

  6. 6

    Search for a property within your budget. The property should be less than the amount you can borrow. If you find a property that is priced at more than what the bank will loan you, make an offer for what you can borrow but be prepared to walk away if you cannot buy at or under your price limit.

  7. 7

    Negotiate closing costs. Once you find a property that suits your needs, ask that the seller pay for the closing costs. Oftentimes, sellers are willing to pay closing costs so they can quickly sell their property. Keep in mind that they may decide not to pay, or they may offer to pay only part of the costs.

  8. 8

    Close on the property. The closing on the property describes a meeting at which both the buyer and seller sign papers and exchange title and keys to the property. It's at closing that you will need to give the bank the down payment. You can write a check for this using the money you borrowed as a personal loan.

Tips and warnings

  • Subtract the estimated closing costs from your personal loan. The remaining amount is the sum of your down payment. You need to anticipate having to pay the closing costs.
  • If you can't get a personal loan from the bank, seek out other ways to acquire funds for a down payment.

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