How to Flip Houses with No Money

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Flipping houses takes a lot of money. You have to buy the home, repair the home, pay for carrying costs and then sell the home, which all takes cash. The great thing about investing in real estate is you don’t always have to use your own cash. There are many ways to borrow money for flipping and you can even fix and flip a house with no money. The less of your own money you use, the less profit you will usually make per house, but that doesn’t mean you will make less money total.

How much cash do you need to flip a house?

The amount of cash you need to flip a house will depend on many factors, but I will start with how much cash invest on my flips. I use a portfolio lender who lends me 75 percent of the purchase price. I use my own money for the down payment and most of the other expenses as well. Here is a quick break down of what the costs might be on a house I flip that costs $100,000 to buy.

  • Repairs $20,000
  • Carrying costs $4,000
  • Buying costs $2,500
  • Selling costs $7,000
  • Down payment $25,000
On a typical flip I buy for around $100,000, I will have over $50,000 of cash into the property. However, not every flipper operates like I do and you can flip houses with much less money. In fact I borrow some private money, which decreases the amount of cash I need to flip.

How can you flip with less of your own money?

Even though I can spend $50,000 in cash to flip a house, there are ways to spend much less. I borrow private money from a relative and I use that money to help pay for down payments and repairs. I still use much of my own money, but that private money allows me to buy more flips and make more money. I do have more expenses when I borrow money, but if you don’t have any money or borrowing more money allows you to flip more houses it is probably worth the extra expense.

Here are some different options to borrow money when flipping houses.

  • Portfolio lenders: I use a portfolio lender, who lends me 75 percent of the purchase price, but not all lenders are the same. Other portfolio lenders may let you borrow more money.
  • Hard money: hard money lenders will often let you borrow much more than traditional banks. The rates are much higher in most cases on hard money loans.
  • Private money: private money is money you borrow from private investors. You can borrow as much as they will lend you and rates will vary greatly depending on trust and your relationship to them.
  • Crowd funding: Crowd funding is a brand new way to borrow money. Multiple investors pool their money to Invest in a flip project using an online platform. The rates tend to be similar to a hard money loan.
  • Partnerships: Many flippers have a money partner who pays for all the costs of the flip and also takes a percentage of the profits.

How to finance flips with no money using a portfolio lender

My portfolio lender has great rates at 5.25 percent, but they only offer loans as high as 75 percent of the purchase price. They don’t lend on any of the repairs or other expenses. Portfolio lenders keep their loans in-house and that is why they have different programs and more flexibility than a traditional lender. Some portfolio lenders will loan a higher percentage of the purchase price and some will even loan on repairs. Portfolio lender rates will also vary greatly from bank to bank. Before lending guidelines changed a few years ago, we used a different lender who gave us a $700,000 line of credit that could be accessed at anytime. That bank changed their policies and eventually went out of business. I have not seen any offers like that in the last five years. If you can find the right portfolio lender, they may offer you financing for all the costs on a flip. Most lenders will only loan that much money to very experienced investors, who are very solid financially. Here is a great article on how to find a portfolio lender.

I have a great book on how to finance real estate that you can check out in the Invest Four More store or on Amazon.

How to flip houses with no money using a hard money loan

Hard money lenders are not banks, but companies who borrow money from investors at a certain rate and then lend that money to other investors at a higher rate. Hard money lenders focus on short-term loans that are geared towards flippers. Many hard money lenders will lend on the ARV (after repaired value), not the purchase price. That means if a house will be with $150,000 when it is fixed up, they would lend 70 percent (percentages will vary) of the fixed up value, not what you buy the home for.

For example if I buy a flip for $100,000 and it will be worth $150,000 when it is fixed up, my portfolio lender will lend me $75,000. If a hard money-lender will loan 70 percent of the ARV, they would lend $105,000 on that same property. If the home would be worth $200,000 after repairs they would lend $140,000 on the deal. If you get a good enough deal you may be able to borrow all the money needed to flip a house from a hard money-lender. With hard money lenders they are also going to lend to experienced investors who are solid financially. They also may be hesitant to lend the entire amount to someone they have never worked with before so you may need some of your own cash on your first deals with them. One drawback to hard money lenders is they normally charge over 10 percent interest and up to 5 points on the loan amount. Here is an article with much more information on hard money lenders.

How to fix and flip houses with private money

Private money is money that comes from private investors. The hard money lenders takes money from private investors and then lends it to different investors to complete real estate deals. If you can find private money lenders directly you can cut out the middle man and borrow money at much lower rates. If you want to borrow private money you will have to convince whoever you are borrowing from that you are a good investment and you won’t lose all their money. Here is a great resource to help you find private money lenders and present a deal to them. If you find a private money-lender you will be able to borrow the entire purchase amount, plus repairs and other costs if the lender is okay with that. The amount the lender will give you all depends on the comfort level between the investors, the experience and the deal. Finding private money is not easy and many times private money comes from friends and family. I pay six percent on the private money I borrow, but rates will vary greatly. You can structure private money to fund an entire deal or use it with other types of funding like a portfolio loan. Here is a great article on how to lend private money.

How to flip homes using crowd funding

Crowd funding is a brand new type of lending that is similar to hard money. A crowd funding platform uses the internet to find investors to fund fix and flips and many types of investments. The investments can be very small ($5,000) and many investors will pool their money together to fund a deal. The crowd funding company finds investors to lend the money too and charges those investors a higher rate than what the funding investors are making. The crowd funding company will again want experienced investors who are solid financially. The amount they lend will depend on how good the deal is and how experienced the investor is. Here is a great article that goes into more deal on crowd funding.

How to flip with no money using a partner

The most common way I see people flip homes with no money is by using a partner. A private money-lender makes money by making a percentage off the money they loan. A partner makes their money by making a percentage of the profits on a flip. Most partnerships include a person who finds the deal, makes the repairs or hires a contractor and sells the home. The other partner provides the money for the purchase, repairs and other costs. The profit splits can vary, but a 50/50 split is very common for this type of deal. Finding a partner will be similar to finding a private money-lender. They will both be private investors, the only difference is in how the deal is structured. It is usually cheaper to pay the investor an interest rate on the money he invests, instead of a percentage of the profit.

This company will partner with investors on fix and flips throughout the country.

How hard is it to flip homes with no money and no experience?

Most options that people use to flip homes with no money are only available to experienced investors. If a company is going to lend a lot of money to a stranger, they will want to see a track record showing that investor knows what they are doing. If it is a bank lending the money they will want to see the investor has money, has assets and is otherwise financially stable. For those who want to flip with no money and no experience this leaves few options. The only route that will work for most inexperienced flippers is private money or a partnership. The investor will have to be very convincing that they know how to find great deals, they know how to manage contractors, and they know the values.

How much money do you leave on the table with no money down

When you buy a flip with less of your money it will add expenses. When I buy flips my financing costs are pretty minimal with a one percent origination fee, 5.25 interest rate on the portfolio loan and 6 percent interest on private money. My finance costs are usually under $5,000 on a typical flip. If you use a hard money loan or crowd funding you will likely pay at least twice as much as I do in interest and origination fees (points). Not only are you paying twice the fees, but you are financing much more money, which will add to the costs. Here is a look at my costs versus a hard money loan.

My costs on portfolio loan for a $100,000 purchase and $75,000 loan:

Interest over 4 months:      $1,312

Origination fee:                    $1,000 (this is minimum)

Private money ($50,000): $1,000

Total:                                       $3,312

Costs on a hard money loan for a $100,000 purchase and $125,000 loan:

Interest over 4 months (12%): $5,000

Origination fee (4 points):        $5,000

Total:                                             $10,000

With the hard money loan you pay three times more than what I pay. I even included private money in my loan, which added more interest costs. Technically my financing was with no money down as well, but the structure of the financing is extremely important. I have 8 flips going right now and my private money does not come close to covering all the cash I need for that many flips. While I may be able to do one or two deals with private money, most of my flips involve my own cash. For an investor that wants to invest with no money it will be very expensive unless you can find a great private money source.

If you want to use a partner to fund your flips, it is easy to figure what the costs would be. If you make $30,000 on the deal, then you owe your partner $15,000. The best way to make a lot of money flipping houses is to find private money at reasonable rates or save your own money and keep it invested in the business.


It takes a lot of hard work and money to flip houses. When you are just starting out it is going to be very hard to find financing if you don’t have any of your own money. Wholesaling may be a better way to get started, because it can be done with virtually no money. For more information on what it takes to flip a house check out the ultimate guide to house flipping in any market.

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