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Want to flip a house but don’t have the cash upfront? 

In this article, we are covering 10 options for real estate investors who want to start flipping, ranging from little to no money down.

#1. Traditional Mortgage

Most people start their search for cash to fund a flip by visiting their local bank. If you have a good standing relationship with your bank, a decent credit score, and some kind of down payment, this could work well for you. 

However, the reality of this situation being ideal for most real estate investors is slim. If you are working off of limited cash, you likely won’t get approved. This is because traditional banks have strict requirements for down payments on loans for investment properties: typically for 20% or higher. If your bank won’t approve you, don’t worry. There are still plenty of other options to consider.

#2. Hard Money Loan

Hard money loans are most real estate investors’ go-to resource when it comes to funding a flip. Hard money lenders are usually more friendly to investors than traditional banks, and they have the experience to guide you through the process, unlike traditional banks who specialize in traditional homeownership. 

Hard money lenders can potentially be more flexible when it comes to the terms of your loan for investment property. They may not have the credit score or down payment requirements, and they could be willing to lend you money on the sheer strength of your investment property and plan. They will also offer a faster solution to getting a hold of cash than traditional banks, though the interest rates are typically higher. However, if you can pay off the loan quickly after you flip the house, you won’t pay interest for very long. If you need a hard money lender, learn more here.

#3. Home Equity

If a traditional mortgage or hard money loan for investment property is out of the question, and you already own a home, you might consider tapping into home equity to fund a house flip. This is a task your bank can typically help you with, and it can come in three different forms. 

You can refinance your mortgage for a higher amount and claim the difference in cash, take out a line of credit backed by home equity, or take out a second mortgage on your home. Talk to a professional financial advisor before considering these options to learn which would be the best for you, and make sure you understand the rules regarding these different financing methods.

#4. Private Money Loan

A private money loan is similar to a hard money loan, except that it may come from any individual. While hard money lenders are typically certified individuals or companies, a private lender could be anyone with extra cash, including people you know, such as family or friends. 

For this reason, private money lenders could potentially be more flexible than hard money lenders when it comes to getting property investment loans. If you choose this option to fund a house to flip, make sure you have an attorney write up a legally binding contract and understand all of the terms of the property investment loan.

#5. Crowdfunding

Only have a little bit of cash but want to find houses to flip? Crowdfunding is a solution where you can contribute a portion of the funds needed to pull off an investment property flip in exchange for a portion of the returns. This will require you to invest equally in a house to flip with other investors. You’ll need some cash to get started (or possibly a smaller property investment loan), but it will be much more financially feasible than funding a house to flip on your own.

#6. Seller Financing

Seller financing is when a seller becomes the bank or private lender, and allows a buyer or investor to take possession of the investment property on the agreement to make regular payments on principal and interest. This can be a viable option when a seller is looking for a passive investment opportunity and doesn’t need the cash upfront. 

Keep in mind, this type of arrangement could be difficult to come across, and it can be messy if you don’t have a good contract in place. If you default on your payments, like a bank, the seller will repossess the property. Make sure that if you choose this option for receiving a loan for an investment property, you know exactly what kind of an agreement you’re getting into.

#7. Partner Up With Other Investors

Are funding options not working out for you? Maybe you don’t need any cash at all to start investing in houses to flip. If you have other skills you can bring to a team of real estate investors, they may consider sharing a percentage of profits with you without requiring any money down. Desirable skills could include home renovation, marketing, and real estate business experience, among others. This might not be the easiest situation to come by, but with some networking, you could find yourself houses to flip without investing anything but your time, energy, and expertise.

#8. Wholesaling

While wholesaling property isn’t a traditional way to flip the house, it could be a better route if you don’t have cash on hand, and you’re out of property investment loan options. In this case, you’d be getting homes under contract, then selling the rights to the contract at a higher price. Ultimately, you’ll make money by flipping the contract and charging a wholesale fee without having to invest a dime.

This can be a tricky process, and you’ll want to use the help of a realtor or attorney to draft a contract that includes protections for you. Be sure to include a contingency that states you can back out of the contract if you do not find a buyer.

#9. Mobile Homes

Finding houses to flip doesn’t mean you’re limited to traditional homes. Mobile homes can prove to be a lucrative opportunity for flippers who have less cash to invest. Some mobile homes can be purchased for only a few thousand dollars, and with a little TLC and some repairs, they can be flipped for quite a profit. 

#10. Bird Dogging 

While bird-dogging isn’t a traditional house flip by any means, it can still be loosely interpreted as house flipping, and it can be a great way to break into real estate to raise money for other investment ventures. 

As a bird dog, you must find buyer leads for sellers, and typically you’ll receive either a flat fee for providing leads, or you’ll receive a referral commission if a deal closes. One thing to keep in mind is that in some places, receiving referral fees is illegal if you do not have a real estate license. So, if you plan to become a bird dog, be sure to check your local laws or factor in the time it will take to obtain your real estate license.

The Bottom Line

Investing in houses to flip doesn’t have to be reserved for individuals with lots of cash on hand. Even if you don’t qualify for traditional financing, there are plenty of creative ways to secure loans for investment properties.

Need a hard money, private money, or crowdfunding solution to finance a house to flip? Check out our options for property investment loans here to obtain funding from lenders competing for your business. No credit check is required. Just answer a few simple questions and instantly get connected with your next loan for investment property.