Ways to Buy a Rental Property without any Money


Given the real estate sector’s opportunity for investors, many people are willing to start their careers as an investor. However, this requires an excellent amount. Undoubtedly, having a big chunk of money for investing in a rental property can be great for investing.

But it is not the only way. There are multiple other ways to buy a rental property with zero down payment or low down cost. So, when you don’t have enough funds or if you want to try out some creative ways to buy real estate, then here are the top 6 ways you can consider making your purchase. For sure it will guide you well.

Buy real estate with no money down- What does it mean?

Generally, traditional lenders like the credit union or Bank require the borrowers to pay a down payment while purchasing a rental property. The down payment typically here is around 20%. If considered in cash, it will be thousands of dollars to buy the first rental property.

When someone says they have invested in a property with no money down, it means putting forward very little or no money for the investment. Some real estate investors use other people’s money for the down payment or opt for creative financing options to eliminate the need for a down payment.

Using this idea, one has to pay a tiny amount or no down payment for the purchase. It is vital to note that you will have a better chance to earn a huge return when you put in low money in an investment. This is why most real estate investors use different techniques to reduce the money they have to put in the transaction.

How to purchase a property with no money down?

One can consider some techniques to invest in a real estate property without worrying about the initial down payment.

1. Make the primary residence rental

There is no specific requirement that your home needs to be single-family property. There is a widespread technique known as house hacking. You can buy a multi-family unit to live in as a primary residence while renting out the other teams.

It is quite a popular method that new real estate investors use to start investing using a low amount of money. Besides this, by using a low or no down payment with assistance like the federal housing administration, one can purchase property for as little as a 3.5 % down payment.

Although you have to pay some money here it will be a lot better than 20%. It is quite a fair deal one can consider for the first investment.

2. Leverage other property

When you have a high credit score and own some other property, you can use this opportunity by getting a home equity line of credit. It is a unique financing option that allows the borrowers to take out a loan up to 75% of the property’s equity as determined by the formal appraisal.

One can then use that money to purchase the other property depending upon the home equity in the commercial real estate business. Thus, the investors using this technique can easily buy a property with either zero down payment or a little payment.

3. Use seller financing

Owner financing is yet another non-traditional option one can consider for financing a property. The seller of the property here acts as a lender for the buyer. Thus this reduces the hassle of the buyer to go to the bank to get the traditional financing.

However, according to the repayment terms mentioned in the formal agreement, the buyer has to pay the loan over the given time.

Some sellers have a clear idea about the terms they will accept for the financing, like a down payment, specific interest rate, etc. While the others are open to negotiations.

If you have good skills, you can determine the seller’s needs, and it will be possible to negotiate for financing with no money down. However, this will work only when the need to sell the property exceeds the owner’s desire for a down payment.

4. Assume seller’s mortgage

It is yet another popular option one can consider buying investment property with no money down. Here you can buy a rental property according to the terms of the current mortgage of the owner.

Of course, there can be specific details required for a small down payment, but depending upon the seller’s needs, it is possible to assume it can be easy to purchase with no money down.

It is quite a creative way to buy distressed properties. However, the options are not restricted to this. Depending upon the needs of the lender, the loan amount cannot be presumable.

For example, some of the lenders might include the “due to sale” clause. This means that the entire loan balance will be due in case the property is sold. However, only a few lenders allow this.

5. Opt hard money loan

Hard money loans are among the intelligent option. They are commonly used for financing properties that cannot be approved for the traditional financing options. Thus investors make the purchase chooses hard money lenders.

The financing here is up to a certain percentage of the property’s current or future estimated value. In addition, the cost of the repair or renovation will be included in the final price.

Therefore, if you have good negotiation skills, you can purchase at a pretty low rate. Besides, you can buy with no down payment if you are within the hard money lenders loan to value requirement.

Hard money is available for a short period that ranges between 6 to 18 months. However, they come with a higher interest rate, given the risk involved. With such loans, the interest rate is 5 to 10% higher than the traditional options.

Therefore, this method will be the best to purchase a property with no money down only if you have good credit or plan to cash out refinance once the property is repaired.

6. Partner for the investment

It is a standard method that most investors choose to purchase a property with no money down. Herein they make use of other people’s money for the purchase. You can easily find a private lender or a partner for the investment.

They will provide the money you are lacking or the entire purchase amount. The money here will act as a down payment. But in return, you will have to pay them a return for the investment.

The partner you choose here can either be your friend, family member, or your colleague. Here is the available option to structure the returns.

  • A joint venture where the ownership will be shared in respective percentage
  • A lending agreement wherein the investor will get a preferable return on the initial investment
  • A private loan wherein a partner is paid monthly payments interest only with a balloon payment
  • A combination of two or more return structures mentioned above

Successful real estate investors make use of multiple methods to make a great return. Besides the structures mentioned above, there are numerous other options to make purchases.

But it is vital to understand things better about the industry. Besides, one can experience significant challenges throughout this process. But it is possible to buy a property with no money down.

Even though you are a newbie in the industry, you can purchase investment properties with no money down.

By using the techniques mentioned above or other options for sure, you will have the opportunity to save your money on the investment and put it in other assets that will offer you better returns over the years.


Many deals and options will make complete sense to put more money down to get a monthly payment and a better interest rate. You must have a clear idea about the opportunity to analyze them and see if they make sense for the purchase.

Making a purchase of rental properties with no money down is one of the most convenient and most accessible ways of owning a property. Although there will be multiple challenges, you can undoubtedly receive excellent returns from the properties.

If you are planning to make the purchase, then you can consider contacting Private Capital Investors. The company has experienced professionals who can provide you expert help. They will find the best properties that will bring forward great returns.

Besides, they will also help you with your investment to ensure you make the most of it. The professional guidance and support here will boost your rate of success.

So, instead of taking a risk with your investment, it will be better to opt for professional assistance as it will surely provide you great results.

Want to learn more? Get in touch with us today.

Similar Blog

Want to learn more? Get in touch with us today.

Our experienced team is ready to assist with your financing needs.

2101 Cedar Springs Road Suite 1050 Dallas, TX 75201