How to Start Flipping Houses With No Money

Dreaming of real estate ventures but not sure how you can get started flipping houses with no money or very little? It may seem impossible, but where there’s a will, there’s a way! And that way is borrowing money from investors or financial institutions. In fact, most house flippers don’t use their own money.

How Much Does It Cost to Flip a House?

There are a lot of different costs associated with home flipping. The main ones include:

  • Renovation expenses
  • Repairs & maintenance cost
  • Taxes & insurance
  • House utilities during rehab process
  • Real estate agent fees
  • Title & closing costs
  • Optional: advertising/marketing cost

It’s also wise to overestimate a little bit or have an extra “just-in-case” budget, in case something ends up costing more than you estimated. Or if there’s an issue that arises during renovations and repairs. Having an extra fund for these situations set aside will help you avoid a potential disaster, and running out of money during renovations if something unexpected arises.

Finding Funding for House Flips

There are several options for funding a deal by investors, rather than digging into your own savings. It’s actually pretty common in the house flipping world to not use your own money for your ventures.

Funding Options:

Private Lenders

This is a super common source for funding home flips. Money lenders are essentially just banks without the endless hoops to jump through, and extensive processes. They can be virtually anyone that is interested in investing and has the capital to loan out to others to fund ventures or projects.

Private lenders are not associated with any financial institutions or government-backed agencies. This means they get to pretty much play by their own rules and set their own parameters. This can be beneficial to you, but it also often comes at a steep interest rate, or giving up some of your profits. That being said, working with a private lender has a lot of benefits:

  • Quicker access to money (sometimes even within hours)
  • Less qualification requirements
  • Large range of funding amounts available
  • Typically result in a quicker close on the property in contrast to the bank loan process (it can take as long as 30-45 days to close on a loan from a bank)

In exchange for the funds from private lenders, most will require a promissory note, and a mortgage or trust deed on the subject property as a sort of insurance policy. Some may even ask borrowers to guarantee the loan with their own assets, but all terms with private lenders are negotiable and you may have more leverage depending on your experience or location.

Hard Money Lenders

Hard money lenders are companies that specialize in lending for short-term real estate-backed loans. They’re usually affiliated with a company, rather than solo-lending individuals like private lenders. They are not traditional lending institutions, though.

Hard money lenders operate similarly to private money lenders, and have rates that are typically slightly higher than traditional institutions (often 11-15% and additional upfront fees). Just like private money lenders, there aren’t universal guidelines and rules for them to follow, so each one will have their own parameters and processes. This provides you with an opportunity to shop around to find one that fits your needs or is willing to negotiate a deal that’s acceptable to you.

Lastly, hard money lenders often don’t loan out the entire amount required to make a purchase, usually only 70 percent of it. So if you’re not looking to come up with the last 30% to purchase the property, you’ll need to look into private money lenders or do some crowd-funding from friends and family. 

How to Find Hard Money Lenders:

There are loads of hard money lenders all across the country. You can find them by searching online for hard money lenders in your area. From there you’ll get results for companies that work with hard money loans, and you can contact them to get more information. Another way to find reputable hard money lenders is by reaching out to other real estate professionals and flippers in your network that have experience working with hard money lenders to see if they have any contacts that you can reach out to. Note that if you don’t already have a personal relationship with people in the industry though, they may not be willing to help you if you’re their “competition.”


Wholesaling is gaining in popularity because it enables investors to make money in a short amount of time, albeit not necessarily the kind of returns you’d be looking at if you were full-on flipping projects. The process involves finding properties for sale, getting them under contract, and then assigning the contract to a new buyer – you’re basically finding a deal and assigning new ownership for a fee. The wholesaler makes money based on a flat fee or a percentage of the final sale, usually between five and ten percent.

It can be a great way to make money, but will require you to network, canvass neighborhoods, and get creative to find opportunities that aren’t easily found on the MLS or real estate websites.

Partner with House Flipping Investors

One great way to get funding and also learn from the experience of others, is to partner with house flipping investors that have done deals in the past. This alliance gives you access to money, but protects you from making beginner mistakes that can be avoided with experience.

Network and check out the resources in your area for partnership opportunities. Note that if you don’t have a personal relationship already with an investor/expert, they’ll likely charge a fee or want a large percentage of the profit from the deal to compensate them for their time and expertise.

Home Equity

If you’re already a homeowner, this may be a good option for you to get the funding you need for your flipping ventures. Homeowners can utilize a few options to get access to cash by using the value in their current homes. These include:

  • Cash out refinance: redoing your existing mortgage and taking the difference between the two loans as capital for your venture.
  • HELOC (Home Equity Line of Credit): allows you to borrow against your property equity. This provides investors with a lump sum and the interest on it is potentially tax deductible in some cases.

Option to Buy

This is a process where investors agree to purchase a property after leasing it. Renters occupy the space and agree to purchase the home at the end of the lease agreement, at a price determined at the time of the original contract.

This is a great option if you’re willing to live in the property during the time period allowed, then flip later after you buy. As you can imagine, this is more of a long-term solution rather than a quick flip situation.

Seller Financing

This is similar to taking out a loan from a private lender, but the lender is the owner of the property (the seller). The availability for this will depend on the market, obviously in a hot market sellers are likely not going to bother offering financing options.

If it’s something you’re interested in, however, you can search for properties that are advertising seller financing, or pitch the idea to a seller whose property you’re interested in.


This is a financing strategy that involves relying on multiple investors who each contribute to the loan. There are various websites that can help you accomplish this by crowdfunding from strangers, or you can seek out real estate specific sites that help pair flippers with funders to streamline the process. Crowdfunding can also be done with your friends and family.

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