Is it possible to start house flipping without money in Orion Township, Michigan? It might seem a simple question at first glance, but it’s actually a loaded one. After all, how can you flip houses with no budget? Real estate investing is more convenient if you have money. 

Perhaps the question points to the investor not releasing money of his own. In this case, it’s possible to flip houses with zero budget. However, it takes courage and knowledge to pursue this endeavor. 

Here are some ways to flip a house with no money. 

Crowdfunding

Crowdfunding is a pretty popular way of financing a project nowadays. This practice means raising small amounts of money from a large group of people through online platforms. These individuals contribute a small amount until the required funding is met. They will get repaid with the amount lent plus interest. 

Raising money through crowdfunding is typically time-consuming unless you use an online platform offering a pre-fund deal. Another disadvantage of this method of raising funds is your ability to negotiate is limited. However, the great advantage of crowdfunding is you won’t need to release your own money for a down payment. 

Wholesaling

You can make money from wholesaling properties to house flippers. Your job is to search for a property and negotiate with the seller. If you can lower the purchase price and closing costs, it’s an opportunity to make a profit out of it. Then, find a house flipper to buy the property from you and do the rehab. 

Wholesalers can also generate money in another way, which is asking for a percentage of the final price when the flipper sells the property. He won’t own the property and pay for its renovation cost. You simply scout for a property that’s worth flipping. Make sure to get in contact with investors and house flippers to be successful in this endeavor.

Parnter With Real Estate Investors

Another way to start house flipping without using your own money is to look for investors to fund the project. You can find many people in the real estate industry willing to finance, but anyone can invest in the project, such as your relatives, friends, or business owners. 

Approach the individual or group of individuals you have in mind and arrange the deal. Typically, the investor will provide the fund, and you will handle the work to be done (property search, negotiating with the seller, and supervising the renovation). 

The investor gets their returns by contributing money, and you make money by spending time and effort on the project.

If you’re a newbie in house flipping, it’s advisable you hold off formal partnerships in the beginning. Test the waters and stay as an independent house flipper until you build a reputation which investors can trust. Then, create a solid business plan and enter into formal partnerships. 

Traditional Banks

Traditional banks can provide you money through a loan if you meet all the loan requirements. Applying for a traditional bank loan can be a real challenge, especially for house flippers. But if you have a solid business plan, you can get funding for your project. 

See to it that you have good credit or relationship with your bank. Moreover, have the confidence that you can get the loan.

Hard Money Lenders

It’s also a good option to approach a hard money lender to fund your house flipping project. The advantage of getting financing from a hard money lender is that there’s no strict credit requirement. Just show the lender the after-repair value of the property. 

However, the downside is that hard money lenders charge an exorbitant interest rate. The interest can range from 15% to 20%, plus the fees. If you think you can renovate the property and sell it quickly, you can get a short-term loan from a hard money lender. The benefit of a short-term loan is you pay less in interest.

Seller Financing

Seller financing is an option if you can’t find anyone to lend you money  for your house flipping project. The good thing about seller financing is there’s no stringent qualifications. But the hard part of this is finding a property seller who is willing to finance your purchase. 

You need a down payment for seller financing, but it comes in a smaller amount than traditional lenders. The advantage is that you don’t need to pay for agent commissions because you go directly to the seller. 

Takeaway

Yes, it’s possible to do house flipping without shelling out your own money. You can look for investors or borrow money from traditional and non-traditional lenders to fund the project. Make sure you have a solid business plan to attract partners and qualify for financing. Remember that you need to get good returns from your project at the end of the day.