Stop Saying I Don’t Have Any Money And Get Started In Real Estate Investing

Have you ever said, “Investing in real estate is impossible for me because I don’t have any money or access to cash”? Well my friend, the good news is your belief is NOT TRUE!

Having no money is not a good excuse for staying stuck in neutral. In this article, we’re going to discuss how you can get started in real estate investing, three types of real estate investing and how much money you need for each.

  1. Wholesaling

Get Started In Real Estate Investing by wholesalingAs a wholesaler, you pretty much know how this works. You find a motivated seller and sign a purchase contract. Then you find a third party to whom you can resell the same property at a higher price for a profit. You assign the original purchase contract to the new buyer and the new buyer pays you an “assignment fee.” Your original purchase contract usually contains an “inspection period” or “contract clause,” which allows you to back out of the contract if you don’t find a buyer to whom you can assign your contract. (Of course this isn’t an issue when you partner with Express Homebuyers!)

Here’s an example of how that works:

You sign a contract to purchase a house for $150,000. You come to Express Homebuyers and we agree to buy the property for $160,000.  You assign the contract and all its rights to us for the difference between the $150,000 and $160,000. That means you make $10,000 the day we buy the property.

How Much Money Do You Need for Wholesaling?

You need money at two different points. First, you need to market to find motivated sellers. If you truly have $0, you can reach out to sellers who’ve posted their properties on Craigslist under real estate for sale or rent. You can also find sellers on sites such as or Zillow. If you’re willing to go out and use some shoe leather, you can walk around neighborhoods with distressed properties and knock on doors.

Then, once you’ve found a motivated seller, you’ll need an earnest money deposit (EMD). Depending on what you negotiate, you may be able to sign a contract for a very low deposit amount. I’ve heard of wholesalers putting down a deposit as low as $10.00. You can also sign a promissory note for the EMD.

  1. Fixing & Flipping

bathroom renovations are part of getting started in real estate investingThere’s no mystery to this investing method either. You find a motivated seller and purchase his house at a discounted price. Then you make all the needed repairs and renovations before selling the house quickly at or above market value. The “fix and flip” situation works because you’re purchasing a property with built-in equity. Once you improve the property, you capture that equity as a profit.

For example:

You buy a house for $200,000 that is worth $300,000 all fixed up. You spend $30,000 on renovations to make the property move in ready. Then you find a buyer and sell the property for $275,000.  After paying real estate commissions of 6% and closing costs you net roughly $20,000.

How Much Money Do You Need for Fixing & Flipping?

In this case, you need money at several different points. First you need the EMD for the contract. That’s typically 1% of the purchase price, so for a $200,000 house it will cost you $2,000, or you can get really creative and use the promissory note mentioned above.

Then you need a down payment. Most investors use hard money loan to purchase properties. defines hard money lenders as “typically private individuals or small groups that lend money (Hard money) based on the property you are buying, and not on your credit score. Usually these loans cost (percentage-wise) much more than an average mortgage, often times up to twice what a regular mortgage does, plus high origination fees.” Sometimes you can borrow up to 100% of the purchase price. Other times you may need to make a down payment of 20% to 30%.

Closing costs could be 2- 5% of purchase price. So in our scenario, it was $8,250.

Renovation costs are a huge variable because you can make an educated estimate, but you never know what you’ll actually run in to. In the above example, we put repair costs at $30,000.

Remember to include monthly interest carrying costs, utilities, permits and staging expenses. It’s smart to factor a 5-10% contingency into the budget.

With all this unpredictability, joint venturing with us sounds pretty good, huh?

  1. Buying & Holding

getting started in real estate investing, rentingWhen you employ this strategy, you’re betting that you can make money either on rental income and/or selling the house in the future at a profit. You’re anticipating that the area in which you’re buying will continue to be a good and desirable place to live and that property values will increase.

How Much Money Do You Need for Buying & Holding?

Once again, you need the 1% of the purchase price EMD upon signing the purchase contract. Remember that for a $200,000 house, that’s $2,000.

Unlike the Fixing & Flipping scenario, this time you’d likely buy the property with conventional financing. Of course you may choose to use a creative financing alternative such as “subject to” investing or buying via “agreement for sale” or “land contract,” But in most cases, you’ll need 20% of the purchase price for your down payment. So again on a $200,000 property the down payment would be $40,000.

Since closing costs are usually between 2% and 5% of purchase price, again we’ll use $8,250.

It’s unlikely you’ll be buying a move in ready property, so count on repair costs to make the property rentable. And then factor in your holding costs – mortgage payments, HOA fees, and utilities bills when the property is vacant. No doubt your goal is to rent the property for more than what your monthly costs are and make a positive income!

Clearly if you don’t have ANY money or access to cash, Fixing & Flipping or Buying & Holding are not likely to be the best route for you to go right now. Nonetheless, money is NOT an excuse for not getting started in real estate investing.

Click HERE to find out more about how we can help you make money on ALL the good real estate deals in the Washington DC you can find.

Have you signed up to attend the DMV’s premier wholesalers meetup yet? Meet other wholesalers and aspiring wholesalers and join the discussion of how to find and close more deals. See details at

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