How to Flip Houses with no Money and Bad Credit

Flipping houses with bad credit and no money can be quite difficult, especially because of the complexity of the mortgage process involved. However, it gets better when you understand the several options you can explore, especially if you are just starting a new investment. There are a lot of investors ready and able to lend you the funds you need to complete your first deal, as well as other creative ideas you can run with for a successful deal.

Let's find out more about flipping houses and how you can achieve one without money or bad credit.

house graphic with coins around

What is Flipping a Houses?

Flipping houses is a process real estate investors use when buying properties, carrying out maintenance or repairs, and selling it for a profit. This is an important strategy that helps investors sell properties as fast as possible instead of living in the property. 

Flipping a house is quite lucrative, especially if an investor can locate an undervalued home, purchase it for less than the market value, and receive the highest possible bid when putting the property back on the market. While there are several costs involved, flipping houses with bad credit or no money can still be done using several different methods.

How to Get into Flipping Houses

You don't need to wait to run out of money or decide to buy the first property you are most excited about when you can familiarize yourself with some of the processes for flipping a house. They include:

#1. Make Proper Research

Getting excited about your first project can cause you to ignore a very important part of the process. But skipping the real estate research can lead to a terrible house-flipping experience. If you want to be a successful house flipper, you need to know more about picking the right property, the right purchase price, and which states are best for flipping houses.


urban neighborhood homes

#2. Work With a Budget

Once you understand more about your local real estate market, you need to find out how much money you have to cover the costs of flipping a house. The 70% rule offers a guideline for new real estate investors on how to determine the maximum price for buying a house. 

The purpose of a flipper is to buy low and sell high to maximize their earnings. When looking at real estate listings, the 70 percent rule can come in handy. It states that investors should pay no more than 70% of a property's after-repair value, irrespective of the cost of the repairs to refurbish it.

The after-repair value or ARV of a property is the amount a flipper can sell a home after renovation. As an investor flipping a house, you must be able to estimate how much the property will sell after its renovation. Multiply the figure by 70% and deduct it from the estimated cost of renovation. 

The result is what flippers should be willing to pay for that home. Below is the formula for the 70% rule:

After-repair Value (ARV) ✕ .70 − Estimated Repair Costs = Maximum Buying Price

#3. Get Funds Ready

The truth is that real estate investment can be quite expensive. With high upfront and ongoing costs for house repairs, it can quickly add up and get out of hand. Unless you have some savings laid aside, you will need to fund and finance your flipping process. 

If you decide to borrow money to fund your flip, ensure you ask your lender questions about the mortgage process. Understanding the lending process will make the flipping process easier. Just remember that going into debt when flipping a house can increase your financial risk.

How to Flip Houses with No Money and Bad Credit

If you are still asking, 'how can I get into flipping houses with no money and no credit? You will soon get your answers. However, note that you will need to use other people's money or other creative financial sources. 

Flipping houses without money or with bad credit can be done in various ways, such as:

#1. Find a Business Partner

If you don't have money or good credit to start this deal, you need to find someone who does. A lot of new investors have this idea that there aren’t people out there willing to give them money or allow them to use their credit to make a move. But the truth is that there are more people out there that do not just have money but also want to invest in real estate. 

As an income hacker, you need to play the hustle part of the deal while your potential lenders provide the credentials you need. This is a halfway profit split arrangement, which you may not be willing to go into, but still, a paycheck that you can use for a successful deal. You could google other real estate meetups in your area, visit online forums or even start calling real estate investors.

#2. Hard Money Lenders

Hard money lenders are simply lending companies that offer specialized real estate-backed loans. They are usually affiliated with a company that primarily specializes in lending and offers shorter loan terms to avoid confusion with other lending institutions.

Apart from their affiliation with a company, hard money lenders will operate a lot like private money lenders. Not only are their lending guidelines a lot easier to deal with, but their rates are also slightly higher. However, you should note that there are no universal hard money lender guidelines as each of them come with a different set of criteria.

#3. Wholesaling

Wholesaling houses can enable investors to make a lot of money in a short time, making it easier to flip houses. It involves finding properties for sale, getting them under contract, and assigning the contract to a new buyer. However, while considering this process you should note that wholesale properties are not easy to come by, and neither are buyers. Despite being a lucrative opportunity, investors will have to put in the necessary effort to succeed as a wholesaler.


#4. Option To Buy

The option to buy or lease option is when you agree to purchase a property after leasing. During this process, renters occupy space and then agree to purchase the home at the end of the lease agreement. As soon as the contract is signed, you can determine the purchase price and the rent payments will act as credits toward the final price. This is a great idea if you want to know how to flip houses with no money and bad credit, as lease option homes don't usually require upfront payments.


#5. Live-In Flip Process

If you want to dive straight into flipping a house, you may want to consider buying a property as your primary residence and renovating it while you live there. This can expose you to different financing opportunities that offer beneficial loan terms and reduced down payments. If you can renovate your home yourself, you get to save money on labor. You can even decide to renovate in sections allowing yourself to extend the timeline without cutting off your profits.


#6. Crowdfunding

Crowdfunding is a great opportunity for house flippers who can't secure mortgages from other lending institutions. It is a financing strategy that depends on several investors who contribute a portion of your total loan. You can search online to find various sites designed to connect house flippers and crowd funders to strike a deal.



Today, you don't need to use your own money if you want to start an investment plan. It doesn't mean your own money wouldn't help, but it's certainly not necessary. 

The best thing to remember when discovering how to flip houses with no money and bad is that your best chances of receiving funding are going to be from private money lenders, hard money lenders, and other investment partners. Each option is available to you to start a great deal!

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