6 Ways to buy Property with no money

May 10, 2021
buy property with no money


6 Secrets of Buying Property with No Money Down

The first thing to say, of course, is that money will be needed to get into property. But this article is about buying property with no money down & the different ways of using other people’s money (OPM) or other organisation’s money to fund purchases and refurbs - plus all the different ways that you can become a property investor or property developer.

So, the six ways that we're going to cover are using banks, rent to rent, asset finance, lease options, investor funds and creating joint ventures.

Let's start with number one, banks.

  • Banks’ money

Banks tend to like traditional property projects in terms of lending, so they will want to see conventional development models.  We see the BAR model working well here:

  • Buy - houses in need of refurb or which are in poor condition
  • Add value - fix problems, make new and, borrow funds to develop
  • Refinance.


You may need to combine this source of finance with another source for it to be a genuinely cash-free in the deal. Banks tend to more conservative and typically may fund up to 75 - 80% of a project. You will need to source the balance elsewhere.

  • Rent to rent

This is where you take a property and give a guaranteed rent to the current landlord or property owner, and then make a higher profit on top.

Typically, this could be a single let property that you turn into a multi-let (HMO).  This means the combined rental on individual rooms being rented should be higher than the payment of guaranteed rent to the owner.

Technically, there is no ownership of the physical property, but you get to control the cashflow for a secured period. Effectively, you are making property income without any cash in the deal.

It is also an opportunity to buy from the owner in future - a strategy we have employed many times

  • Asset finance

If your property business already has assets, or if you are a limited company, you maybe be able to apply for asset finance. The clue is in the name, though; you will need to have some form of asset to offset the finance company's risk.

You might also be able to use the property you are refurbishing to use as collateral for borrowing the funds to do the actual work.  This will depend mainly on the equity in the property and how much an asset finance company would lend.

Other forms of asset finance could include you leasing furniture if you needed it for an HMO project or, furnished serviced accommodation.

There are several asset finance and development finance companies, so do take some time to look around and make enquiries.

  • Lease options

You get a property, and you can buy/pay for it an agreed number of years' later. The owner is effectively using their property equity and supplying the house to you. It offers the option - not obligation - to buy the property at a fixed, agreed price.

With lease options you will need to pay for a solicitor and a small nominal consideration but essentially, this is a low-cash property strategy.

  • Investor funds

Through networking and meeting more property people, you will find a number of investors.  These investors could be cash-rich and time-poor, who are looking for better ways to generate a return on their money.

Going to investors directly can be quite daunting, but we offer courses that provide a lot of ideas and useful advice to help navigate this area.

One of the critical pieces of advice is to know your numbers and make sure you can answer questions. If you don't know the answer, say you don't but that you will find out.  Building good investor relationships can be a great way to expand your business, then further once you have completed a few successful projects and made everyone money.

These investors can then become a great source of capital during periods where other source of funds become harder, such as during a recession.

  • Joint ventures (JVs)

50 / 50 JV's with parties are about coming together to provide 50 / 50 value. You don't necessarily have to bring the money. If someone has the money but no deal, no time or no know-how, then they don't have anything without you.  This is the mindset you need to have with JVs.  It needs to be a partnership where both parties understand the value the other brings.

Most effective JVs are between two parties that are missing something. Three things are needed for a JV to be effective:

  • Time
  • Skills (sometimes finding the deal itself is the skill)
  • Money


It could also be something as simple (for you) as providing the build team, the planning know-how, the knowledge or, the potential to manage the project.

If you have time and skills to buy good deals, then a JV partner can help you with the cash. A so-called armchair investor, they might be busy running a business or some other venture that requires their focus.

Always get a contract to understand what is happening on the project and make sure everyone’s roles and responsibilities are clearly defined.  It is better to have this and not need it rather than need it and not have it.

As you can see, there are several different ways of raising finance; this can be combined or used to help you invest and generate revenue from property without having a large pot of money to start with.

Property investors and business owners have a wide range of options available to them, so do look at those that fit with your situation and make sure if it matches your strategy.  Research here is vital; don't simply rush in as you feel you need to get the deal done.


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