Skip to Content

How To Flip Houses With No Money: Money Saving Tips

Flipping houses can be a very savvy way to make a second income – or even as a method for your primary income.

However, to flip houses, you normally have to have a budget to make repairs and improvements to the property.

How To Flip Houses With No Money: Money Saving Tips

So what do you do if you have no budget? How do you flip houses with no money? Well, most of the solutions will involve raising a budget – but you could also opt for a lease option on the home prior to renovations.

I’m going to cover all of these solutions and more in this comprehensive guide. I’ll cover what house flipping is and how it works, along with some of your best solutions to flip houses with no money.

In short, if you’re trying to flip houses with no money, you need to turn your attention to attaining new forms of finances, or look to lucrative quick sale schemes. But there’s more to know than just that!

What Is House Flipping?

Flipping houses can be a rather lucrative investment opportunity. As I said earlier, some people actually make this a full time income, whereas others can use it as a secondary income method.

Flipping houses, otherwise known just as “flipping”, is a strategy to make quick profit through property. An investor purchases real estate at a reduced price and then improves the property to raise its value.

Once the investor has completed their renovation, they sell the property for a much higher price than they purchased it for originally and then reap the profits. It is quite simply “buy low, sell high”.

Now, while house flipping can be an excellent and relatively simple way to make potentially huge profits, it is not always smooth sailing.

Many factors come into play, including the cost of repairs, the real estate market at the time and of course – your own finances.

To make the needed repairs and improvements to these properties, you’re going to need a budget.

If you’ve got little to no money – you need to raise some, at least in the early days of your house flipping career.

Flip Houses With No Money

How To Flip Houses With No Money: Money Saving Tips

Now that you’re familiar with exactly what house flipping is, I’ll now cover some of the ways you could potentially get started.

As I mentioned, the majority of the methods of flipping houses will require a budget. As such, the “easy” solutions are about making more money.

1. Hard Money Lenders

Most people will turn their attention to a hard money lender when they have no money for something like flipping. Hard money lenders are people that can loan you funds, but usually at a high interest rate.

This is because they are typically “easier” to borrow money from, because there’s not so many loopholes and obstacles to jump over to get the funds you need.

On top of this, they allow you to borrow comparatively – unlike some banks.

This solution is definitely the one for people who are experienced investors, or for people who have a number of properties.

One of the best things about hard money lenders is the fact that you can finance pretty much all the necessary repairs to the property you are buying through them, which can make flipping even more simple – at least on the financial side of things.

Hard money lenders do not determine your financial options based on your creditworthiness, which is another benefit.

However, it’s important to recognize that not only will the interest rate be higher than a traditional bank loan, but also they normally only cover around 70% of the purchase price of the property.

It’s critical therefore to pay attention to all of the terms of the proposed loan agreement and assess your options carefully before you accept it.

2. Private Money Lenders

For people who have the experience and the knowledge to flip houses but do not have the budget, then a private money lender option could be the right move.

Private lenders are typically individuals who have the funds at their disposal and actively want to invest in real estate – but they might not necessarily have the time or the right know-how themselves.

These lenders will commonly offer you the money with a pre-agreed interest rate. This type of agreement can benefit both parties, but once again – it’s not without its drawbacks.

You could find yourself in unforeseen situations and be unable to make the repayments.

However, in these scenarios, you might be better off than you would be with hard money lenders, depending on how familiar you are with the private lender.

3. Wholesaling

A wholesale transaction involves sourcing a listing by a motivated seller – perhaps due to foreclosure or a house in particular distress.

The buyer will submit a contract which is usually well under the market value with a stipulation that payment is made in full in quick time.

The buyer then finds a third party real estate investor to buy the property and receives a finders fee.

While this is often less than you’d normally get through normal flipping, it avoids any renovation and no need for a loan.

4. Leasing Option

Finally, you may decide to opt for a specialized lease agreement. As a tenant, you’d agree to purchase the property after a certain amount of time has elapsed.

While this is a great way to save some money initially, your return will take a lot longer than other methods.

On top of this, you will need to get permission to make any repairs and changes to the property while you are a tenant.

If you can get such an agreement, this can be an ideal way to stretch your budget over a number of months or years, rather than outright.

As a result, there may be no need for a loan or other finance option.

Final Thoughts

Flipping houses usually requires some money to begin with, but as you have seen – there are other options available too. I hope this guide has been useful for you. Good luck with your flipping journey!

Leave a comment

Your email address will not be published. Required fields are marked *