You fund a first real estate deal with no money down by using other people's money or by never buying the property at all — wholesaling, transactional funding, private/hard money, partnering, or seller-based financing like subject-to. "No money down" is real, but every option has a real cost or a real catch. Here's the honest tour so you pick the right one.
This is education, not financial or legal advice. Creative-finance moves in particular carry legal risk — get a local attorney involved before you use them.
First, the mindset
"No money down" almost never means "no cost." It means the cash comes from somewhere other than your bank account — and you pay for that with fees, interest, a profit split, or added risk. The goal isn't free money; it's a structure where a good deal can still happen when you're short on capital.
The options, from lowest-risk to most advanced
1. Wholesaling (buy nothing)
The cleanest "no money down" path: you never purchase the property. You put it under contract and assign it to a cash buyer for a fee. Cost: your time and a small earnest-money deposit. Best first move for most beginners.
2. Transactional funding
For a double close (you buy, then immediately resell), short-term lenders front the purchase price for hours to a day, for a flat fee or points. Your cash stays at zero, but the fee eats into profit and you need a buyer lined up. Common when a contract can't be assigned.
3. Private money
An individual — often someone you know, or an investor in your network — lends you the funds, secured by the property, at terms you negotiate. No bank, flexible, relationship-based. The catch: you have to have the relationship and honor it, and it should be documented properly (promissory note + security).
4. Hard money
Asset-based loans from lenders who care about the deal more than your credit. They'll often finance a large share of purchase + rehab, close fast, and are built for flips. Cost: high interest and points, short terms, and real risk if the project stalls. It's a tool for deals with a clear, fast exit — not cheap money.
5. Partnering / joint venture
You bring the deal and the work; a partner brings the cash; you split the profit. Zero dollars in, but you give up a share and you're accountable to a partner. A great way to do your first few deals while you build capital and a track record.
6. Seller financing & "subject-to"
The seller effectively becomes the bank (seller financing), or you take title subject-to the seller's existing mortgage — you make the payments, but the loan stays in their name. Powerful, but here's the catch beginners miss: most mortgages contain a due-on-sale clause, and federal law (the Garn-St Germain Act) makes those clauses enforceable — a lender can call the full loan due when the property transfers without its consent (12 U.S. Code § 1701j-3, Cornell LII). Subject-to is legal but carries this real risk, so it's an advanced move that demands an attorney and full seller disclosure.
Which one for your first deal?
- Truly no cash, no experience: wholesale it, or partner.
- You found a flip and have a buyer/exit: hard money or transactional funding.
- You have a relationship with capital: private money.
- The seller has a low-rate loan and motivation: consider (carefully, with counsel) seller financing / subject-to.
The honest risks
- Leverage cuts both ways. No money down means no cushion if the deal goes sideways.
- High-cost money demands a fast, sure exit. Hard money on a stalled project is painful.
- Creative finance is legally sharp. Subject-to and seller financing have real compliance and disclosure requirements. Don't freelance them.
The come-up move
Start where the risk is lowest — wholesale or partner — bank some profit and a track record, then graduate to private money and creative finance as your skill and network grow. That progression is the come-up ladder.
Start free on Squatters to learn the funding stack and case deals that actually pencil. Squat it. Fund it. Own it. 🦝