Don't think you have enough money to invest in real estate? Here's how 4 investors got started with less than $10,000 upfront.

  • Buying a home may be more attainable than you think.
  • Insider spoke with four real-estate investors who got started without much cash upfront. 
  • They used strategies like buying with an FHA loan and partnering with someone to split the costs.

Buying a home may be more attainable than you think. 

“There’s a misconception that you absolutely have to put down 20% and save up tens of thousands of dollars in cash in order to purchase a property,” Seattle-based investor Ludomir Wanot told Insider. “That’s not the case whatsoever.”

He got his foot in the door with just $5,000 of his own savings. 

Wanot isn’t the only successful property investor Insider has spoken with who got started without much cash. Here’s how four investors, including Wanot, bought their first properties with less than $10,000 upfront. 

Insider verified each individual’s property ownership and income claims.

Natia and Jervais Seegars used a grant and an FHA loan to buy a $191,000 home with $2,000 upfront

natia jervais

Natia and Jervais Seegars are financially independent thanks to their real estate portfolio, which consists of properties in North Carolina, California, and Georgia.

Courtesy of Jim Resonable Photography

Before Natia and Jervais Seegars could afford to buy their first home, they got a lot of “no’s” from lenders, said the couple, who now own five properties that bring in $30,000 a month in revenue. After three years of building their credit and paying down debt, however, they finally qualified for a mortgage.

They closed on a $191,000 home in North Carolina, where they were living at the time, in September 2006 and spent just $2,000 upfront.

That’s partly because they financed it with an FHA loan, which is a government-backed mortgage that gives people the opportunity to buy a home with down payments as low as 3.5%. (Note that a requirement of using an FHA loan is that you have to purchase a primary residence and live in it for at least a year, which is important to know if you’re planning on renting it out.)

A 3.5% down payment on a $191,000 home, however, would come out to about $5,700 — and that number doesn’t include closing costs, which typically end up being 2% to 5% of the loan cost. The couple managed to close with just $2,000 of their own savings thanks to a grant that they qualified for at the time: The Genesis Program, which offers down payment assistance to low- and middle-income home buyers using an FHA loan.

They encourage first-time buyers to understand the resources that may be available to them. You could qualify for down payment assistance, which could allow you to purchase a property with little-to-no money out of pocket, as long as you can provide proof of a good credit score.

Ludomir Wanot bought with his brother, split the upfront costs, and utilized an FHA 203(k) loan

ludomir wanot

Ludomir Wanot lives with his girlfriend in Tacoma, Washington.

Courtesy of Ludomir Wanot

When Wanot decided he wanted to buy real estate, he didn’t have consistent income to show lenders nor did he have a lot of savings. However, he was able to get his foot in the door by partnering with his older brother, Jan.

Jan, who’d been working at Boeing for about two years, qualified for a loan and the brothers started searching for properties in the Seattle area in 2016. Jan would be listed as the buyer but they agreed to split expenses and profits evenly. 

The brothers ended up using what’s called an FHA 203(k) loan to afford their first property: a single-family, fixer-upper that they bought for $138,000. 

This type of FHA loan finances the purchase and renovation of a home. Without it, they wouldn’t have been able to afford renovations, which ended up costing $30,000. But since they rolled the remodeling costs into the loan balance and put down 3.5%, “we were in for no more than $10,000,” he explained.

They split the upfront costs, meaning they each paid less than $5,000.

“What I’ve realized over the years with buying properties is that cash is king,” said Wanot, who now owns more than 10 units throughout central and western Washington and runs a real estate wholesaling business. “The less cash I can come into a property with, the more properties I can continue to buy.”

Dominic Kosteris bought a modest starter home even though he could have afforded more

dominic kosteris

Real estate investor Dominic Kosteris and his family.

Courtesy of Dominic Kosteris

Chicago-based real-estate investor Dominic Kosteris bought his first home in 1996 after working two jobs for a couple of years and living with his parents in order to save as much of those two incomes as possible. 

It was a $53,000 two-bedroom townhouse that he financed with a three-year adjustable-rate mortgage (ARM) and 10% down payment. 

“I could have afforded a bigger house but I figured that would be more expensive,” the high school history teacher told Insider. With a $53,000 starter home, however, “I’ll have less money to save.” He put $5,300 down, plus paid a couple thousand dollars in closing costs.

It’s a simple strategy — buying less home (or a smaller home) than you may be able to afford — but it works. The less expensive the property, the less money you’ll have to pay upfront.

Today, he owns 64 single-family homes and is financially independent, thanks to the rental income they bring in. He still works full-time as a teacher and is a modest spender, he said: “To this day, I can honestly say I’ve never paid more than $70 for a pair of gym shoes. I’m not into name brand stuff, even though right now I can afford it.”

Sean Allen bought out-of-state in a more affordable market and invested with a friend

sean allen

Los Angeles-based real estate investor Sean Allen and his fiancé.

Courtesy of Sean Allen

Sean Allen, who used real estate investing to pay off $81,000 in debt and build a $1 million net worth, got started with $8,000 in savings. It wasn’t enough to buy a place on his own, especially since he was living in an expensive market (Los Angeles), so he went in on his first property with a friend.

Combined, they had about $16,000 in cash. They worked backwards and figured they could afford something around $60,000. That purchase price would allow them to put 20% down ($12,000) and have $4,000 left over to go towards closing costs.

They were both living in southern California and figured they probably weren’t going to come by a $60,000 property in that market. So they started looking in Greensboro, North Carolina, where Allen went to college. 

They flew to Greensboro to meet with a real-estate agent, looked at properties, and found one they could afford: a 2-bed, 2-bath short-sale property they got for $53,000 in December 2013. They put 20% down (about $10,600) and did a few minor home-improvement projects, like cleaning the carpet and adding fresh paint to the walls. 

Becoming a property investor all started with a conversation with his friend back in 2013.

“It’s very important to facilitate conversations about what you’re interested in with as many people as you can. If you’re interested in real estate, you might find a business partner, a loan officer, another investor, a mentor, a tenant, or a roommate,” said Allen. “We often shy away from talking about money, debt, and investments because they’re personal. But one of the things I’ve learned is you can learn from other people’s lessons and mistakes before you make the same ones. It will save you money, time, and stress.”