How to Flip Houses With No Money and No Credit: 3 Ideas

While it is possible to start a house flipping project without your own money, the money does have to come from somewhere. A popular approach to this problem is “OPM” or other people’s money. To learn how to flip houses with no money and no credit, there are many ways to approach it, but these three below are the most popular by far.

Believe it or not, there always other people in the world looking to invest what money they have into projects that they feel could be successful. There are a number of different types of investors and ways to approach investing like partnership, private investors, and hard money. We outline them here:

1. Partnerships

A partnership refers to the process in which two people combine forces to tackle a housing project. One of the partners will pay for the initial costs of the home and any improvements that are to be made before the property is resold. The other partner (you), will be in charge of the rest of the logistical responsibilities of flipping the house like hiring contractors to do renovations, or doing them yourself.

In turn, each partner will receive fifty percent of the end profit. Because you will be giving up half of your final profit, this perhaps should be considered as a last resort option if you cannot find another type of investor.

Although there are thousands of ways to structure a partnership in house flipping, this is one of the most common ways. Be creative and figure out a partnership strategy that's right for you.

2. Private Investors
A private investor is a person, who is not associated with any particular bank or business, willing to invest on your project. Finding a private investor may be as easy as looking close to home. People like friends and family; from co-workers to fellow churchgoers to members of your local chamber of commerce to your family dentist can all act as private investors. They are essentially people with disposable incoming looking to make a good return on their investments.

3. Private Hard Money Lenders
Like banks, hard money lenders will loan you out a sum of money expecting you to later repay the amount plus interest. Unlike banks however, these lenders do not typically regard things like the borrower’s assets, income or credit score. This means that if you are a person with no money and no credit score, hard money lenders  are still eager to loan you money.

In addition to the interest they charge you, they will also charge you what are called “points”. One point equals one percent of the loan they gave you. Typically, hard money lenders will charge you somewhere between five and six points on each loan.

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