Top 5 Ways to Get Started In Real Estate Investing With Little Money

Have you always wanted to invest in real estate but never believed you had enough money to get started?

Maybe you’ve been stuck renting for a while and never managed to save enough money for a down payment. Or perhaps you own your primary residence, but most of your income goes to paying off the mortgage.

Whatever the case may be, investing in real estate can seem like a daunting, if not impossible, task. But it doesn’t have to be.

The truth is, you don’t need to have a lot of money to get started. You just need to be creative about how you invest.

In this article, we’ll go over the top five ways to invest in real estate with little to no money. Here we go.

1. House Hack Your Primary Residence

If you already own your primary residence, one of the easiest ways to get started in real estate investing is to do something called house hacking. Basically, this is the art of generating extra income from your home.

It can take many forms. For example, you could rent out a spare bedroom, storage space in your basement, or even an extra parking space.

If it’s generating income from your home, it’s house hacking. You then use the extra rental income to help pay for your mortgage or to save up for a separate investment property.

If you want to take house hacking to the next level, you can buy a property with multiple units (such as a duplex, triplex, or fourplex) and live in one while you rent out the others. Depending on the rent and the number of units, the extra income may cover your entire mortgage and then some.

The beauty of this type of house hacking is that you can still buy the property with a conventional residential loan (since you are living in it). The property just has to have no more than four units.

You might even qualify for special first-time homeowner loans like the FHA loan, which allows down payments as low as 3.5%, or USDA and VA loans, which allow down payments as low as 0%!

Later, if you no longer care to share the property with others, you can turn it into a stand-alone rental and hire a property manager to manage the units for you if you don’t want to do the work yourself.

2. Build an Accessory Dwelling Unit (ADU) Rental

Another easy way to get started in real estate investing is to build an accessory dwelling unit (ADU) and use it as a rental. An ADU is a small residential unit that shares a lot with another (usually larger) property.

To qualify as an ADU, it must have a separate entrance and all the necessary amenities for living: a bathroom, kitchen, heating, and so on. ADUs come in two basic forms: attached and detached.

Attached ADUs share a wall with the primary property, and detached ADUs don’t, obviously. You can build an ADU from scratch or convert an existing structure into one (like a garage or cabin).

Just make sure you check your local housing regulations to be certain they allow ADUs where you live.

Once you build the ADU, you can rent it out on a regular 12-month lease or as a short-term rental (STR) on a platform like Airbnb or VRBO. The right decision will depend on your preferences.

Short-term rentals provide less predictable revenue and require more frequent cleaning (at least once between each guest), whereas long-term rentals provide more stable rental income but less privacy (the tenants are always there). Think about which strategy fits your personality better and do a little market research to assess which will generate the best ROI.

On the whole, ADUs are on the rise and a great way to invest in real estate if you already own your primary residence.

3. Wholesale Properties to Other Investors

If you have absolutely no money, you might consider going into wholesaling. This refers to the practice of finding properties for sale, putting them under contract, and then selling the contract to interested investors.

Basically, you’re selling your ability to find great real estate deals. The beauty of wholesaling is that it doesn’t take any money to get started and you never have to put any in the game.

You can literally start knocking on doors today until you find a seller and then sell the lead to an investor. The downside is that wholesaling takes plenty of skill and effort.

Get ready to spend many hours generating seller leads. Eventually, you’ll likely have to dedicate a budget to marketing if you plan to do this full time.

But if you like to hustle and you’re not afraid of work, wholesaling can be a great way to get your feet wet in real estate investing.

4. Buy Shares of Real Estate Investment Trusts (REITs)

Not interested in managing or hunting down properties? Then you might like investing in real estate investment trusts (REITs).

REITs are large companies that own and operate income-generating properties. They could be commercial properties like hotels and businesses, or residential properties like multi- and single-family homes.

Many REITs are publicly traded, which means you can trade them on the stock market just like stocks. You can buy shares of REITs directly or purchase shares of mutual funds or exchange-traded funds (ETFs) that contain REITs.

Because you can sell your shares at any time, REITs are much more liquid and low-risk than most real estate investments. Plus, they help you diversify your portfolio.

Instead of putting all your money into a single property that could drop in value, with a REIT you may spread your risk across hundreds of different properties (and property types).

In addition, investing in REITs is truly passive. The company behind the REIT takes care of all the property procurement, financing, and management.

All you have to do is set up a brokerage account with a company like Vanguard or Fidelity (if you haven’t already), through which you can buy shares of the REIT. Then you can sit back and relax while you collect dividends to pocket or reinvest.

You won’t have as much control over which properties you’re invested in, but you can all but forget about the investment and let it increase in value while you sleep.

5. Invest in Fractional Real Estate (Aka Crowdfunding)

For a long time, real estate investing was a game for the rich because there was such a high barrier to entry. Many couldn’t afford to acquire a second property, let alone become an accredited investor, because it required substantial initial funding.

That started to change when REITs came along in the 1960s. Now real estate investing has been democratized even further with the help of real estate crowdfunding (aka fractional real estate investing).

Ever since the 2012 JOBS Act, real estate syndicators have been allowed to raise funds from non-accredited investors. This lets small investors pool their money together to go in on big real estate deals that they wouldn’t be able to otherwise.

The first real estate crowdfunding platform was Fund rise, which launched in 2012. Since then, many other platforms have emerged, including Arrived Homes,, Landa, Fintor, Crowdstreet, and Realty Mogul—to name just a few.

Some of these platforms allow you to invest in real estate with as little as $5, which dramatically lowers the barrier to entry. To get started, all you have to do is set up an account, which you can do in a few minutes.

Then you choose a property (or properties) to invest in and immediately start reaping the rental income and appreciation for your fraction of the property. It’s that simple.

Final Thoughts

Investing in real estate doesn’t require a lot of money. Start with one of the strategies listed above.

Then let the power of compounded returns help you save enough to buy your first traditional investment property. From there, your investment portfolio will just keep growing!