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How to Buy Rental Property with No Money

How can you buy rental property with no money?

Before I started investing in real estate, I worked with an investor whom would only buy properties using this strategy.

Mind you this was back in 2013, when using this strategy was a bit easier being that it was a buyer’s market, one of the factors that helps in employing this strategy.

However, it can still be done today if the right opportunity presents itself.

So, what are all the factors that need to be present for this strategy to work, so that you can buy a property with no money?

Click below to find out!

"Let’s buy this property", my partner says to me, passing me a sheet of paper.

I take a look at it, and it’s a huge multi-unit property that was priced way more then I could afford.

Even worse, I had no money at the time, being that all my capital was tied up in other properties that I was renovating, to either sell or refinance, so buying any property at the time would’ve required a miracle.


It would have required buying it with no money.

How though?

Sure, I had learned how this could be done, but never attempted it, knowing all the factors that need to fall in line for this to work.

But after talking with my partner, he answered my questions, and sure enough, buying the property with no money could be done.

1) First factor that needed to be realized was that the current owner must own the property outright, meaning, he had no mortgage or debt on the property.

2) Second factor that needed to be met was if the owner was willing to hold a mortgage for a year or 2 for all or a portion of the purchase price.

3) Third factor that needed to be met if he wasn’t going to hold a mortgage for the entire purchase price, which in our situation, he wasn’t willing to do, was to then come up with the funds for the balance of the purchase price to buy the property.

And this was the tricky part, finding a lender for the balance of the purchase price.

This is because banks won’t finance the balance if the other portion of the purchase price is held by the vendor, which would make it so that you were buying it with no money.

So, that meant we would have to find a private a lender, which we ended up doing, whom would finance the balance, thus allowing us to buy the property with no money out of own pocket, which we did!

So just to recap, in order to buy a rental property with no money, the factors that need to be present


  • No debt on the property

  • Owner owns outright

  • Owner holds a mortgage

  • This could be for portion or even all of the purchase price for a negotiated term and negotiated interest rate on the loan, on the mortgage.

  • This is what is called a vendor take back mortgage

  • Private lender to finance remaining portion

  • If the owner isn’t going to do a vendor take back mortgage

  • Buyer’s Market

  • This as I said is because sellers are more motivated, and are more willing to hold a mortgage, just so they can sell the property.

  • This also only works if the owner doesn’t need the funds right away

  • Also, to help motivate them to agreeing to this, offer them a good. enough interest rate on the mortgage, obviously much better then they could get by just putting the money they’d get if sold the property, in a savings account.

Now, here’s the dirty little secret that many real estate investors don’t tell you about purchasing a rental property with no money…

Most private lenders whom are willing to lend to you, and owners whom are willing to hold a mortgage for you, aren’t going to do this unless you have some money, or some assets.

In our situation, the private lender we used made sure we had assets, that is, collateral, to protect themselves.

This collateral they were seeking, which any smart lender is going to do, is because they are trying reduce their risk as much as possible, even though they are using the building as collateral buy registering a mortgage on title of the property for the funds they lent.

So, they might have you personally guarantee the mortgage, or they might put a 2nd mortgage on an asset you own, say another income property, or even your personal home, or both!

Either way, be prepared for a lender to do this, especially if like us, you are trying to purchase a property with no money, because they are going to see that you have no skin in the game, and they are definitely going to want some reassurances.

With the risk involved in using such a strategy for the lenders, the main reason both the private lender and owner agreed to it was because our plan was to renovate the property, using a portion of the funds that the lender was lending, to increase the value by much more, thus, reducing their risk if something went wrong and they had to sell the property to get their money back.

Showing your lenders that you are adding equity to the deal is key when trying to buy a property with no money.

Strategies like this aren’t used all the time, but are great to know how to do to help you build your portfolio.


If you are interested in learning more about this strategy, and other strategies I’ve used to minimize the money you need to buy real estate and grow your portfolio, such as vendor credits, the BRRR strategy, and using joint venture partners, check out my 6 week online course; REI on autopilot.

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