For those of you looking to invest into real estate with little to no money, I have good news for you.

I always tell this to people because it’s ought to be one of the biggest misunderstandings in the world:

“Becoming a real estate investor doesn’t necessarily require a lot of capital.”

Buying property and holding onto it, a strategy that requires a lot of money, is just one way of becoming a real estate investor.

There are many ways to get involved in real estate investing, some of which doesn’t require a whole lot of capital, while still providing exposure into the real estate industry.

When I tell this to people who are new to real estate investing, they get super excited and jittery because the hard truth is: the traditional way of investing into real estate is not something everyone can afford.

Not everyone has $100K readily available as down payment for an investment property. 

And even if they do end up saving enough, it might not be the wisest decision to put all your eggs in one basket.

For today’s article, I’m going to introduce different ways you can invest into real estate with little to no money, even if you have just $1,000, $500, or no money at all.

Option #1 – Real Estate Wholesaling (Min. Investment: $0)

If you are familiar with house flipping, the process of buying a home for the intent of selling it for a profit, you’ll find wholesaling to be quite similar.

In real estate wholesaling, you, the wholeseller’s job, is be the middleman between the home seller and a home buyer.

The basic premise is to set a contract with the home seller to purchase a home at a specific price, and then find a willing buyer who will purchase the rights to this contract for a higher price, before the closing date of the contract.

In most cases, the job will be a three step process looking something like this:

  1. Find a home seller who’s willing to contract with you to buy a home for a specific price (ie. $100,000)
  2. Market and leverage your network of real estate investors or other potential buyers who’s willing to take the contract off your hands at a higher price (ie. $120,000)
  3. Transfer the contract to the new investor, reaping the price difference between the home buyer and home seller (ie. $120,000 – $100,000 = $20,000 profit)

As the whole process never requires you to buy the home, this makes it a good way to get started in real estate investing if you have no money.

You’ll have to do a bit of learning though, because the process involves setting up legal contracts with the buyer and seller.

You have to be extremely careful about the intricacies of the contract so that you minimize your risks in the case you can’t find a potential buyer.

After all, you don’t want to be stuck with the obligations of buying their home!

Don’t worry, properly setting the contract means you won’t have a legal obligation to buy the home even if you can’t find any buyers.

And luckily, I’ve written a small guide for new investors like you!

The Whole Contract Thing for Wholesellers

This is the part which intimidates new investors the most when it comes to wholesaling.

They are standing in front of the door leading them to a new world of wholesaling, but after hearing all the complications of setting contracts and everything, they decide not to ring the bell.

But trust me, it’s not that hard.

Sure, you’re going to have to spend some hours looking into this but what you might potentially get out of this is a rewarding investment opportunity with just about no risk.

Remember, you can practically start this without spending a dime!

First of all, I’m going to explain the two basic real estate contracts you’re going to need:

  1. Purchase Agreement
  2. Assignment of Real Estate Purchase and Sale Agreement

Purchase Agreement

Once you’ve found a home seller for wholesaling, the first thing you’ll need to do is sign a Purchase Agreement with the home seller.

This basically lays out all the terms and conditions for the purchase of the home, but more importantly, it’ll detail the purchase price of the home and the closing date of the agreement.

For example, if you sign a Purchase Agreement to purchase a home for $100,000 with a closing date of Apr 30 or prior, then anytime between now till Apr 30, you can settle the contract by paying $100,000 for the home.

Of course, you’re not going to actually settle the contract.

You’re going to sell the right to purchase this home at $100,000 from now till Apr 30 to an eager buyer.

In essence, you’ll be selling this contract to someone else later on.

This is possible because under the laws of the doctrine of equitable conversion, you become an “equitable owner” of the home and basically have the rights to this home as laid out by the Purchase Agreement despite not having legally owned the land yet.

Unless otherwise specifically stated by the Purchase Agreement, you can assign the right to purchase this home to another buyer.

The most important thing to note is that the contract should have a clause that allows you to back out of the deal if needed.

This is because you don’t want to become legally obligated to purchase the home on Apr 30 if you can’t find another buyer for the home.

Tips on your First Purchase Agreement

For your first Purchase Agreement, a good start would be to download a template and fill out the form as much as you can.

As you should be especially careful with the terms and conditions laid out on your Purchase Agreement, I highly recommend finding a lawyer in the beginning to make sure everything looks good.

9 times out of 10, your lawyer will most likely add an extra clause to your template.

Once you’ve finalized your Purchase Agreement, the next contract you’ll need to familiarize yourself with is the Assignment of Real Estate Purchase and Sale Agreement.

Assignment of Real Estate Purchase and Sale Agreement

The Assignment of Real Estate Purchase and Sale Agreement (Assignment Contract for short), is the contract you’ll sign with the home buyer who’s looking to buy your rights to purchase the home.

As it’s name suggests, the Assignment Contract basically transfers the rights of the Purchase Agreement to the new buyer.

In comparison to the Purchase Agreement, the Assignment Contract is much more simple.

By signing it, the home buyer is generally agreeing to pay your non refundable assignment fee (the amount you’ll make from the wholesale) as well as accepting the terms and conditions of the Purchase Agreement.

On signing, the common practice is to attach your finalized Purchase Agreement with the Assignment Contract so that the new home buyer is aware of all the terms and conditions of the purchase.

Again, you can find templates online but I also highly recommend going through it with your lawyer on your first few deals.

After you’ve signed the Assignment Contract, you’re pretty much done! 

As a Recap on the Wholesale Process

Just to reiterate, the process of wholesaling, along with the contracts, go like this:

  1. Find a home seller who’s willing to contract with you to sell their home for a specific price. (ie. $100,000 with a closing date of Apr 30 or prior)
  2. Sign a Purchase Agreement with the home seller with an additional clause that lets you withdraw out of the deal without any consequences
  3. Find a home buyer who’s interested in buying the rights to purchase this home before Apr 30
  4. Sign an Assignment Contract with the home buyer to transfer the Purchase Agreement over to the new home buyer, along with a non-refundable assignment fee (ie. $20,000 assignment fee)
  5. The Purchase Agreement now belongs to the home buyer, and you’ve earned $20,000 from the assignment fees!
  6. Rinse and repeat

Option #2 – Sandwich Lease Option (Min. Investment: ~$1,000)

To tell you about the sandwich lease option, you first have to know what a lease with buy option is.

Lease with Buy Option

A lease with buy option is when you lease a home with the right to purchase the home at an agreed upon price before the end of the lease period.

For example, you might enter a lease agreement where you’ve agreed to pay $800 in rent per month for 5 years, with an option to purchase the home for $350,000 anytime before the lease ends.

Take note that it’s called an option, because it’s not obligatory for you to purchase the home at the end of the lease period.

This is in contrast to a lease purchase contract, where you’re obligated to purchase the home at the end of a lease.

As it’s obviously beneficial to have the extra option of buying the home, you usually have to pay an option fee when signing the lease.

For the option fee, the 1% rule generally applies, which means in the case above, the $350,000 house would come with a $3,500 option fee.

If you decide to execute the option and purchase the home, the option fee is usually applied to purchasing the home. Otherwise, it’s normally non-refundable.

So How Does This Apply to the Sandwich Lease Strategy?

For the sandwich lease option, our goal is to lease a property from the owner and subsequently lease it out to another party at a higher price.

Our profit can come from a combination of rental income, option fees, and capital gains through selling the home.

Let me illustrate the sandwich lease strategy with an example

Bob has been thinking about renting his vacant home in Vancouver but as he’s out of the country, he does not want to deal with the responsibilities of being a landlord.

In comes real estate investor Mark, who’s an expert with sandwich lease strategies. He talks to Bob about his plans and together, they decide to sign a 10 year lease agreement.

Mark signs the 10 year lease, agreeing to pay $600 in rent per month, along with an option to purchase the home anytime before the lease ends for $300,000. Mark pays $2,000 in option fees in exchange for the option to purchase the home during the lease period.

A week later, Mark then finds Rachel, who’s interested in doing a lease with buy option for the same home.

Mark and Rachel then signs a 5 year lease agreement, agreeing to pay $900 in rent per month, along with an option to purchase the home anytime before the lease ends for $350,000. Rachel pays $3,000 in option fees in exchange for the option to purchase the home during the lease period.

After the 5 years, Rachel decided she would buy the home, paying a net $347,000 ($350,000 – $3,000 option fee) to Mark. Mark subsequently pays $298,000 ($300,000 – $2,000 option fee) to Bob, thus transferring the legal ownership of the home from Bob to Rachel.

As you can see, a sandwich lease strategy can be extremely profitable.

Looking at our above example, Mark made $300 per month on the rental difference and a net $47,000 at the end of 5 years.

If Rachel had decided not to purchase the home, Mark would have made $3,000 from the non-refundable option fee and leased the home to another interested party.

From the illustration above, over the course of 5 years, Mark had netted $18,000 in rental income ($300 * 12 months * 5 years) plus $47,000 in capital gains for a total of $65,000!

Take note that for Mark, his initial investment was just $2,000 in option fees, not too shabby of a return eh?

If this strategy is appealing to you, read 8 Tips for a Successful Lease Option Sandwich.

Option #3 – Invest into REITS (Min. Investment: Less than $100)

REITs are my personal favourite because it offers huge flexibility in how much you want to invest and what type of property you want to invest into.

REIT, short for “real estate investment trust”, are companies that buy or finance income-producing real estate across various sectors.

As a REIT, the company is required to distribute 90% of their taxable income to shareholders.

There are different types of REITs but the ones you’ll interact with will be publicly listed REITs on stock exchanges. In short, it’s similar to investing into shares of a publicly listed corporation.

For example, you could invest into a REIT that focuses primarily on senior housing, commercial offices, or even shopping malls.

Now you might see why REITs are a unique real estate investment opportunity. You get the opportunity to invest into real estate properties such as shopping malls which you normally wouldn’t be able to afford!

The best part is, it also doesn’t come with the responsibilities of managing the property.

As you will most likely be buying shares into a publicly listed REIT, it’ll work very similar to buying shares of any other corporation, giving you huge flexibility in how much money you want to invest.

That means if you want to invest into real estate but have little to no money, you can buy as little as one share, but if you have a ton of capital, you can always invest more.

Compared to options 1 and 2, here are some key differences with investing into REITs.

Less Work Required But Smaller Rewards

Investing into REITs mean that it’s going to be less work, a lot less work.

You don’t have to go through the hassle of finding buyers and sellers.

Nor do you have to go through the process of managing the property and setting up contracts, talking with clients, lawyers, and all sorts of other people.

All you need to do is find a stock brokerage platform which offers the REITs you’re looking for and once you buy it, you won’t ever have to touch it again.

Compared to the other two, which are active investments, this is going to be a passive investment.

Obviously, however, with less work comes smaller rewards.

A $2,000 investment definitely wouldn’t net you anywhere close to $65,000 at the end of 5 years.

But in contrast, you’ll be getting a very passive and more stable investment compared to the two above.

All in all, this strategy is probably better for the real estate investors who might not have as much time, but have a bit more capital to invest with.


As we discussed, the options above are three different ways you can invest into real estate with little to no money.

If you have some time on hand, I would highly recommend giving option #1 and #2 a shot, both of which can be very rewarding opportunities.

Regardless of how much money you have saved up, you should find some ways to expose yourself into real estate investing as real estate investing is one of the most consistent ways of building wealth.

And for those of you interested in reading more about investing into real estate with little to no money, take a look at this book by Brandon Turner, “The Book on Investing In Real Estate with No (and Low) Money Down”

by Wayne Lam