Flipping houses can be one of the most exciting ways to make a lot of money quickly and that’s why whenever you turn on the TV these days you can see people making big money by flipping houses.

Flipping houses is sexy and something that everyone wants to do, but when you look at the numbers and cash required, maybe you don’t have the cash to get started right away.

So what do you do?

People have been flipping houses with no money and no credit for decades in Canada and the USA.

If you don’t have capital, you are certainly going to have to be a little more creative and many of these funding methods do not have banks involved at all.

Here are a few ways that you can get your flips funded with no money and no credit:

Hard Money (Low money or no money required, no credit required)– Hard money lenders love lending to real estate flippers. These lenders will lend at 8-18% interest and usually charge origination fees starting at 2% to 6%. They may want you to put cash in the deal, or they may not. They may also lend 100% of the purchase price and renovations. When you start flipping lots of houses, hard money usually comes into play.

Private Lenders (Low money or no money required, no credit required) – Similar to hard money lenders, private lenders are private people who have money to lend. They may be a little less formal than a hard money lender which is usually a business or a MIC (Mortgage Investment Company). Private lenders can expect 8-12% annually on their money and usually do not charge origination fees.

JV (No money required, no credit required) – Joint Ventures – Many flippers get started with Joint Venture money. This is where you bring the deal and the people and someone else you know brings the money. Many joint ventures operate on a profit splitting arrangement of 50/50 , 60/40 or even 70/30 depending on the relationship and this can be a great way to start. However, if you do the math, giving away half your money works out to extremely expensive interest usually 20-30% or more annually and you may want cheaper money after you get some experience.

RRSP Mortgages (No money and no credit required) – If you have a friend with RRSP’s or know of an RRSP lender, you can get money in the 3-8% range from an RRSP mortgage. RRSP mortgages typically are at lower rates because the RRSP is such a bad vehicle to invest with that it commands lower fees. Many investors will use RRSP’s as first or second mortgages on their deals and it can be popular in certain circles.

Hold until sold (No money and no credit required)– If you are a savvy negotiator, you can negotiate a “Hold until sold” arrangement where the vendor holds the property until you fix and sell it for him. This can be a great way to start if you have literally no money and are a little bit creative.

Credit cards (No money required, some credit required) – If you have credit cards with lots of room and the numbers make sense, many investors have done short term flips on credit cards or have funded deals on credit cards. Credit cards can also be a great way to fund renovations.

Consulting Fees (no money, no credit) – If the vendor you are negotiating with demands a price that is too high for their property you can offer to project manage a flip for them if they supply the cash and “hold until sold” and you receive a flat fee for your services. There is nothing wrong with taking a guaranteed $10,000 profit to fix and sell a property for someone else.

There are many ways to flip houses with no money and no credit and the methods above are only a sampling of some of the ways that you can get deals funded.

In real estate, the money wants you more than you want the money, learn to raise money and you will never need a bank again.

I have purchased hundreds of properties with none of my own money and you can too if you get educated.

Respect The Grind,
Stefan Aarnio