How to Buy Houses with No Money Down

Hello fellow investor!

The most common question we receive is, “How to I buy houses with no money down?” I’m here to answer that question. First, I’ll tell you my favorite way, and then I’ll briefly explore a few more.

Zero down technique #1 – Recommended – Wholesale a property to another investor.

Wholesaling is the process of getting a property under contract and then immediately assigning the contract or selling the property to another investor.

I like this method because there’s zero financial risk. You’re not using your money or borrowed money to make mortgage payments, do repairs, etc. The worst-case scenario is that you can’t wholesale it and you waste some of your time and the seller’s time. I’ve seen investors make as little as $500 and as much as $25,000 on one wholesale deal. Somewhere in the $5,000 to $10,000 range is more common. It’s possible to wholesale a few houses a month if you’re experienced and doing this full time.

Here’s how to wholesale a property:

A) Find a motivated seller either through your own marketing efforts or through The easier way is through this site. There are dozens to choose from and very few investors actually call them, so the competition is extremely low.

B) Negotiate with the seller and get them to sign a sales agreement with you or your company as the buyer. If your company is ABC Home Buyers, LLC then you’ll put the buyer as [ABC Home Buyers, LLC and/or assigns]. This allows you to assign your contract to another investor. Put $10 as the earnest money in the contract. I’ve never had a seller actually want the money. They want the bigger payday, which comes when they sell the house to you. (Actually they sell to your investor-buyer, but we’re about to get to that.) Go ahead and fax the contract to the title company or attorney’s office so that they can open title.

Download: Sample Sales Agreement

C) Email information about the deal (address, ARV, repairs, asking price, etc.) to your own list of investors (if you have one) and post it as a Wholesale Deal on Also do a Google search to find the “we buy houses” people in your area and call them. When you call or email potential buyers, you’ll present them with an asking price that is higher than the price you’ve negotiated with the seller.

D) Arrange to meet the investors who are interested at the house, preferably all at once. That way, they can see that they’re competing with each other and need to hurry up and buy the house. This is easier with a vacant house. If the seller still lives there, you’ll need to explain why a dozen people will be entering their home. It often works to let them know that these are the investors whom you work with. One of them may close on the deal instead of you. Honesty’s the best policy.

E) If it’s truly a deal, at least one of the investors is likely to want the house. A bidding war can even break out, which really works to your advantage. You and that investor-buyer will sign a one-page document saying that you are assigning the property to him/her and that he/she is paying you $X now and $X at closing. I suggest getting $1,000 to $1,500 now and the rest at closing. This locks them into the deal. Fax the document to the title company so that they’ll know who the buyer is.

Download: Sample Assignment of Contract

F) A few days later, something miraculous called a closing will occur. The seller signs documents at one time, and the investor-buyer signs at another. They never meet. You don’t show up to closing. You call the title company later to make sure it happened. You give the title company your wiring instructions, and you get the funds one or more days later. Call to congratulate the buyer. Then call the seller for the same reason. Drink a margarita with your buddies to celebrate. Then onto the next deal!

For all the details on how to wholesale, create a free account and then upgrade to Premium. You’ll get access to an interview I did with Bill and Jan Leon. In this interview, you’ll learn: 1) the most effective way to build your buyers list for your wholesale deals, 2) how to fill out a real estate sales contract and assignment form step-by-step, 3) the one deal-killing word NOT to say to a seller, 4) and much more.

Here are a few more “No Money Down” techniques …

Zero down technique #2 – Sometimes recommended – Buy a property that you plan to fix and flip with private money.

If you plan to buy/fix/re-sell a property, there are private lenders out there who will happily loan you the money. And if you’re buying at a low enough price compared to the value, they’ll front you the cost of repairs. I’ve walked out of closings (when I bought, not sold) with checks for up to $15,000. I recommend this technique if you’re in a financial position to keep paying on the loan should something go awry. But if you really don’t have any money, I would highly suggest that you wholesale instead. As a Premium member, you get access to a one-hour audio file on how to raise all the private money you’ll need.

Zero down technique #3 – Can’t do anymore – Buy a long-term rental by taking out a zero-down long-term loan.

Long-term 100% zero-down investor financing is pretty much dead due to the troubles in the housing market. And I’m actually quite fine with that. If a person is unable to front a down payment for a long-term rental, then they shouldn’t be buying rentals.

Zero down technique #4 – Sometimes recommended – Take over someone’s payments

This is called Subject To investing. The seller’s loan will remain in their name, but they’ll deed the property to you. They’ll trust that you’ll catch up their late mortgage payments and continue to make future payments. This will save their credit and get them out of a bad situation. You’ll sell the house to an aspiring homeowner on a rent-to-own basis. They’ll give you up to $5,000 up front. You’ll use this money to pay the past-due payments and make any repairs.

This technique can be somewhat complex, but it’s nothing you can’t learn. I recommend it for properties where you get a huge amount of instant equity and can cash flow by at least a few hundred dollars per month. And I only recommend this to those who have some money in the bank in case the tenant quits paying and/or tears the place up. You also need to make sure that it’s 100% legal in your state. Some states have laws that make this technique pretty darn tough to execute.

To summarize, there are probably a dozen ways to buy with zero down, but if your goal is to invest with little to none of your own money, then I suggest that you keep things simple and low risk by focusing on technique #1.

Hope this helps!

Until next time, happy (and profitable) investing!

Doug Smith
Real Estate Investor
Founder of

P.S. The documents on this post should be viewed as samples only.

Posted on Jul 1, 2010

Author: Doug Smith

MyHouseDeals was founded in April of 2005 and has since provided information on thousands of bargain-priced properties with over $7 Billion in equity (and growing!) In addition to property lists, we help investors succeed by providing valuable tools, resources and education. Most of the properties on MyHouseDeals are single-family houses. Many of these properties are wholesale deals, which are for sale by other investors. Others are motivated seller leads, which are for sale by homeowners who are often in a bad situation. These properties are typically discounted by far greater amounts than bank foreclosures.

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