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  • Writer's pictureKris Krohn

How To Buy Real Estate If You Don't Have Money

Real estate is no way cheap and in order for the bank to loan you money, there are 3 things they're going to ask of you. Let's talk about buying real estate with no money and what your other options are.



I get asked just about every single day, "How to buy real estate with no money?" And today, I'm going to show you exactly what to do. Real estate is very expensive. This house costs $150,000. Because real estate is so expensive, it's also the best tool I know to become wealthy really fast.


If you found a house like this on sale for $120,000 and could turn around and sell it for $150,000, you could make $30,000. This is real. Could you imagine making $30,000 from just one deal? I've done it hundreds of times. I've helped my clients do it thousands of times. And often, it's for way more than $30,000.


But how do you buy a house like this if you don't have $150,000? I'm going to show you. Now, if you want to buy a house but you don't have that much money, you can always go to a bank and a bank will loan you the money.


They call that loan a mortgage. Now, in order for a bank to give you a mortgage, so that you can buy the house, the bank will ask you for 3 things. Let me show you exactly what those things are.


Alright. So, check it out. The first of the three things that you're going to need is a job. Now, I don't care how young or how old you are. You got to land a job and you should land the best job that you possibly can, right? I mean, get a job that'll pay you as much as possible. That'll help. I mean my first job didn't pay me a whole lot.


But I'll tell you that the whole point here is you got to have a job and you got to be in the same industry for at least 2 years. So, technically you could move from one job to the next but if you do, you don't want to move from, like, dentistry to accounting, right? You want to stay in the same line of work for 2 years. That's really important to banks.


Now, the other thing I want to share with you is that actually I'm right outside the building of the first job I ever had. And the first job I ever had was actually in sales. I'm just going to tell you right now, just a little little bonus tip is that if you get a job in sales, there's a lot of useful things you're going to learn that are going to help you in real estate.


Because real estate, even though, it looks about looks like it's about buildings, and brick and mortar. It's actually just about people. And it's about how you communicate and how you work with people. And like most things pay really well in life, sales is a really important thing. So, they're going to train you.


Okay, so the first thing the bank needs from you to qualify for mortgage is a 2-year work history at the same job or in the same industry. The second thing they're going to need for you to have is good credit. This shows them that they can trust you. It also shows them that you're responsible and that you can handle having a mortgage.


So, how do you get good credit? Well, you need 3 credit cards. You need to be careful here. If you use the credit cards the wrong way, it can backfire on you and it can make it harder for you to get the house. So, here's the right way to use the credit cards. First, you need to get 3 of them. Go to banks like this or you can go online and you can apply for very basic

credit cards. We're not looking for anything fancy. And it's okay to tell them that you're using them to develop good credit.


Now, this part is really important. Do not use them to buy stuff you don't have the money for. Only use them to pay for things that you already have the money to buy anyway. And here's the secret. Let's say you have a $100 and you're going to buy some new clothes, use the credit card and buy the clothes and immediately make $100 to the credit card so that you have it paid off. Every time you use a credit card to buy something, you need to quickly turn around and keep it paid off. If you do this with these 3 credit cards, you'll develop a good credit score in time.


Okay, are you ready for the third thing that the bank needs to give you a mortgage? Now, you remember that sales job that we talked about? This sales job, at first even though was hard and it was challenging, it actually allowed me to earn some commission's on the side which is one of the reasons why I recommend it. In fact, if you can put yourself in a position where one way or the other, you can save an extra $500 a month.


That's going to help you with the next thing that the bank is going to ask for which is a down payment. Now, how much of a down payment are you going to need? Do you remember that $150,000 house? For just a moment, let's just say that it is worth a $150,000 but that you can get it for $120,000. So you're getting it out of discount a $30,00 equity position that you get to have if you ever sell that house. So, banks will often require a 3% down payment. 3% on $120,000 is roughly $4,000.


So, $4,000 plus maybe a little extra savings is what the bank's going to ask for you to have when it comes time to actually buy that house. So, just imagine for a moment that you are delaying gratification on some of the nicer things you'd like to have and you're saving $500 a month. Well, if you did that for 2 years, you'd actually save $12,000. More than what you actually need to make this whole deal go down.


Okay, so now you know what to do to qualify for the mortgage. Now what? Well, you need to look at a hundred different houses for sale and pick the very best one. Not the house that's the best but the house that has the best numbers. First of all, you've got to look in the right neighborhoods. If you look in San Francisco or New York City, those houses are going to be way too expensive. You're going to have to look a little ways away from home to find houses in the right price range.


And what if you don't want to live in a house like this? And check it out. This is where I live right now. I designed and built this house just 4 years after buying that very first house using the exact same strategy that I'm teaching you right now.


This is the very first house that I bought. Now, check it out. It's not a dream home. But I bought this house for a $110,000. I later sold it for $165,000 while making incredible cash flow along the way, doing my lease option system. Now, what I want you to understand here is that on your first house, you can do it right or you can do it wrong. And what I mean by that is, you got to buy the right house. Don't buy the wrong house.


The difference is that you got to fall in love with the deal. You got to fall in love with the numbers, not the house itself. The biggest mistake that people make is they think that their first home should be their nicest home that they can possibly afford at this time in their life, and right now that is not the case. This house is about spawning several more because when I bought this house, 4 and a half years later, this was my house.


And my real estate was paying me $12,000 every single month. I was able to quit my job. That's what I call retirement. Now, this all happened since the age of 26. Now, I'm 38 and I only work because I want to. My real estate today is making me a lot more than $12,000 per month, and I only put in a handful of hours. So, I get to play a lot and I get to focus on only doing the things that are important to me. But before I lived here, I lived here.


Now, this wasn't my dream house. This isn't where I wanted to live, but I made some sacrifices, and in a moment you'll see why. And before I lived here, I worked here. I had a 2-year work history. I saved up my $4,000 down payment plus had a few thousand extra in the bank for an emergency fund.


And I used my 3 credit cards responsibly to develop a good credit score. This was not my dream job. In fact, I often really didn't like working in this job. But I had a goal which was to buy real estate. So, I kept working here, and I saved as much as I could every single month.


Okay, earlier I instructed you to look at a hundred houses and buy the one that had the best numbers. Now, there's a couple more things about this house that I want to show you.

Meow. Okay, check this out. You'll notice that there's a couple of doors on this house. Right here, there's one right on the front, right? I lived upstairs.


That was my three-bedroom one-bath. But down this little door behind the car on the side, that's a doorway into the basement. So, what made this house work so well for me is that the basement actually brought in some rent. And by the time I bought this house and refinanced it, I basically was bringing in $550 from the basement, and my mortgage was around $550. So, guess what that really meant? That meant that I was living for free. Now, by the way, this was better than the hole in the ground that I was living in the 400 square feet, but I was living there, not my dream apartment because I was saving money.


Same thing on this house. Not my dream house, but this house, what was dreamy was the numbers on it. Now, some of you are going to look at this and say, "Kris, I can't do that. That's way too hard." Remember how I talked about looking at a hundred homes to make this worth it? And to tell you right now, you might have to look at a hundred deals. But when you find the right one, it makes all the difference in the world.


Look, this is the best way that I know how to get started in real estate. Your first house may not have a basement apartment like this one did. But I'm going to tell you right now. It took sacrifice, it took hard work.


And it was totally worth it because I followed my rules and I did it the right way. And now you know how to do it too. If you're new to this channel, I'll teach you about real estate, Bitcoin, money, entrepreneurship, and wealth. Really the goal of this video was to paint a clearer picture of what's possible with real estate and how to get started when right now, you don't have any money. Now you know.


But I'm sure you still have a lot of questions. Tell you what, subscribe to this channel, and then put your questions in the comments below. I create new episodes every single day. I'll answer them for you and I'll give you the answers to the information that you're looking for.


If you also want to take a more aggressive start, then what I want you to do is actually click the link in the description below, and you can actually talk to my team. We'll give you a private consultation and show you how I can become your mentor and help you get started as quickly as you can.


How to Invest In Real Estate with No Money



Can you actually invest in real estate with no money? Toady, I'm going to get to the bottom of it. But one thing's for sure - YES, it can be done!


If you enjoyed, please hit Subscribe and I'll see you again next week for another real estate investment tip, ""Popular Questions Answered"", or some solid real estate game plans!


Today on REITV we are gonna be addressing probably one of the most commonly asked questions in all of real estate, which is, can you actually invest in real estate with no money? What do you think buying real estate with no money, I think stupid A lot of people claim you can. There's a lot of seminars and there's a lot of programs. And today I'm gonna get to the bottom of it and I'm gonna share with you that yes, it can be done, but I'll even more share with you exactly how I did it.


So let's talk about how you actually get into real estate with no money. There are obviously many ways of doing it. For this video, I'm gonna hone in on one and what better way than actually the very first property that I did, which is that property right there.


Um, many, many years ago, this was the very first property that ended up leading to my hundreds of homes that I now own nationally around the country. And, uh, the reality is, most of the real estate I buy, I don't use any money. In fact, I don't even use any credit. Eric, what about you? Do you think it's possible?


I think it's possible. I think you can have like a bank can help you or something like that, I guess, or a friend, I don't know. But I think it's possible.


On this very first home, I'm gonna actually share with you a strategy though, where I actually used $3,000 that took me 14 months to save up. Now why would I refer to that as a no money strategy?


Well, typically in real estate, if you're gonna put 20% down, that can be 30, 40, maybe even up to $50,000 that you need for buying a single family home below the median. $3,000 compared to $40,000, I'm practically gonna call that no money.


You could use a credit card, you could use mom and dad, a friend a and you could borrow it, get a loan on it. It's a very small sum of money compared to the big game of real estate. Well, I'll tell you what, my very first mentor told me that there are some things that I needed for me to make the strategy work. He said I needed a two year work history, a basic credit score, and that I'd need enough time on the job.


So what I ended up doing was waiting 14 months, saving up $5,000 in the bank, $3,000 of which for a down payment. And I have to tell you, that was me eeking by because I was making less than $25,000 a year. But 14 months later, I had established my three trade lines of credit, meaning three credit cards that I was responsibly using.


And uh, I found this house with the help of my mentor. Now, what makes this house unique, if you take a look at it, it's got a basement apartment and this house was worth at the time, about 150,000. And I bought it for $110,000. That's a $40,000 equity position. So the day I bought this house, I was able to rent the basement, have the basement actually cover my entire mortgage, and I walked into $40,000 of equity. Now this house was bought with just a traditional f h a loan, which even less than average credit scores can qualify for.


And so I bought this first house this way. I lived in it for 12 months and even though it was my home, I considered it an investment because I bought it with that equity. 12 months later, I was able to harvest the equity in it that I could use it to buy this next house that I'm about to show you. This is the second house that I bought.


One of the things that's great about this house, like my first house, is it also has a mother-in-law basement apartment, which essentially means that I was able to rent out my basement and have it pay for 80% of my mortgage. Now how did I buy this house? Well, I got a home equity line of credit from the bank because of that huge equity position on my first house. And basically that's what did my down payment to buy this house.


Now my first house turned into one of my first official investment properties, paying me over $500 a month of a residual income. Meanwhile, living in this house, and you can see it's a significantly nicer house. Well, the equity in both of these properties, uh, were leveraged to buy my third house, my fourth house.


And now let me introduce a second strategy today for how to buy real estate with no money. I used the equity in these homes to buy these four houses, but I had developed a new type of asset. Uh, it was a relationship asset, it was a capital asset where I was able to go to my relationships and say, Hey, look at what I have done here in real estate. And they've chosen to partner with me. My first partner was my father-in-law. In fact, when I started buying my homes, I was so young, he thought I was crazy.


Cause as a college kid, four homes later though, he looked deeper into it and he said, you know what, Chris? You're outperforming my 4 0 1 k. What if I use some of my money? And we partner up, you use your money, you use your credit, and I just keep doing the deals. Hey, that's a win-win. Well, I got up to about 10 properties.


I was a senior in college and I started thinking to myself, you know what I really need? I need more father-in-laws. I went and found more father-in-laws, so to speak. I went and found, um, a doctor in the community that had been tracking my results, uh, an executive for a company, a couple other individuals, and had a chance to take 'em out to lunch, show them my track record. And you know what they all said, sure, we'll put up the money.


We'll partner with you 'cause you got a track record. Ultimately, that's what led to hundreds of homes. So those are my two favorite, uh, strategies for doing real estate with no money. This is the third house that I've ever lived in those first two houses, built that entire portfolio and made this possible.


Eight years ago, my wife and I custom built this 10,000 square foot house and our real estate has taken care of us to this day, basically getting into real estate with practically no money. And it all came down to having a game plan. Now, this is just one way that I know of to do this, and some of you watching this, I hope you steal it. I hope you copy it.


I hope you use it. But there are many other ways of doing that. The whole point is yes, you can do it and have a very concrete game plan and then act out that game plan. Stick to that game plan because in the world of real estate, this isn't something that happens overnight. This is something that you chip away at.


It's something that you work at for years to ultimately get to that place where you have enough residual income coming in that you're retired, it's covering all of your needs. Thank you for watching REITV for more weekly videos. Be sure to subscribe.

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