• Money
    • Budget
    • Shop
    • Travel
    • Stories
  • Career
    • Advice
    • Entrepreneurship
    • Freelance
    • Small Business
  • Investing
    • General
    • IRA + 401K
    • Stocks + Bonds
    • Retirement Planning
    • Estate
  • The Basics
    • Student Loans
    • Credit Cards
    • Debt
    • Taxes
    • More
  1. Home
  2. The Basics
  3. Real Estate
  4. How to Flip a House With No Money Down

How to Flip a House With No Money Down

By: Amber Keefer
  • Share
  • Share on Facebook

It is difficult to buy and resell a home for a profit in a relatively short amount of time. This process, known as flipping, is even more difficult without a down payment. The key to flipping a house without an out-of-pocket down payment is to find investors who are willing to finance the deal and split the sale proceeds. You also must buy a house relatively cheap so that you can make renovations and still turn a profit. Even in an appreciating housing market, completing a flip at minimal cost means knowing what to look for in a fixer-upper.

Foreclosure Home For Sale Sign & House
House in foreclosure sale.
credit: Andy Dean/Hemera/Getty Images

Step

Look for someone who has disposable income to invest. Talk to people in your social and business networks. They may know of investors interested in real estate and they can put you in contact.

Step

Hire an attorney to draw up a partnership agreement after you find an investor. Establish that you want to buy a house to flip and that your partner will provide the cash to purchase with no down payment required. Include in the terms each partner's role and responsibilities. For example, specify that you will invest the time and labor to rehab the property and that the two of you will split the profits when the property sells. Clarify in the partnership agreement how often you will report the progress of the flip to your investing partner.

Video of the Day

Step

Find a house to flip. Tax sales, bank-owned foreclosure properties and estate sales offer opportunities to buy homes at discounts, or lower than market value. You can pinpoint auctions through newspaper ads, online searches and through local real estate agents.

Step

Inspect the condition of the property. You can't always inspect the interior of a property before a real estate auction, however, if possible, do so before the auction date. You can complete repairs faster on a house that needs minor, cosmetic repairs. Fixer-uppers usually are sold "as is," therefore, you should have it checked out by a certified home inspector or licensed contractor before placing a bid or offer.

Step

Set the list price. This should cover the money paid for the home and renovation expenses. Yous should also price the home high enough to cover the time and work you put into the project. Unless you sell the home "for sale by owner," add in the cost of real estate commission fees and all closing costs. Consider, too, that if you own the home for less than a year, profit from the sale is a short-term capital gain which is taxed as ordinary income.

Show Comments

Related Articles

How to Rent a Private House

How to Rent a Private House

The Basics
Renting
By: Maria O'Brien
What Does HUD House Mean?

What Does HUD House Mean?

The Basics
Home Ownership
By: Karen Lawson

PARTNER CONTENT

20 Common Money Mistakes to Avoid

20 Common Money Mistakes to Avoid

How to Find Foreclosed Homes

How to Find Foreclosed Homes

The Basics
Home Ownership
By: Maya Black
How to Buy a House From a Private Seller

How to Buy a House From a Private Seller

The Basics
Home Ownership
By: Amber Keefer
What Happens After a Sheriff's Sale of a Foreclosed Property?

What Happens After a Sheriff's Sale of a Foreclosed Property?

The Basics
Real Estate
By: Shauna Zamarripa

Get Weekly Savings& Finance Tips.

  • Money
  • Career
  • Investing
  • The Basics
  • About
  • Contact Us
  • Terms
  • Privacy Policy
  • Copyright Policy
© 2019 Leaf Group Ltd. Leaf Group Media

Get Weekly Savings
& Finance Tips.

Money Made Easier.

Please enter a valid email.