Buying commercial property with no money down is tough, but not impossible. It usually means being creative with financing, partnerships, or leveraging other people’s money. Here are some of the most common strategies investors use:
1. Seller Financing
- Negotiate directly with the property owner to finance the deal.
- Instead of paying a bank, you make monthly payments to the seller.
- Often works if the seller owns the property free and clear, or is motivated to sell.
2. Master Lease Agreement with Option to Buy
- You lease the property with the right to purchase it later.
- Rent payments can sometimes be applied toward the purchase price.
- Gives you control of the asset without large upfront capital.
3. Partnerships & Joint Ventures
- Partner with investors who have capital.
- You bring the deal, expertise, or management skills, while they bring the money.
- Profits (or equity) are split based on the agreement.
4. Use an SBA Loan (with Rollovers as Business Startups – ROBS)
- SBA 504 and 7(a) loans sometimes require low down payments.
- With a ROBS setup, you can use retirement funds (401k/IRA) without penalties to cover the down payment.
- Not exactly “no money down,” but avoids using personal cash.
5. Assume the Existing Loan
- If the seller has a mortgage with favorable terms, you may be able to take over (assume) their loan.
- Some lenders allow assumption without a big cash outlay.
6. Private Lenders / Hard Money
- Short-term loans from investors or companies willing to finance deals others won’t.
- Higher interest rates, but can close quickly and with little money upfront.
7. Equity from Other Assets
- Use equity in another property (residential or commercial) as collateral.
- Lenders may let you roll that equity into the new purchase, eliminating the need for cash.
8. Syndication
- Raise money from multiple investors for a deal.
- You act as the deal sponsor (the “brains”), others put in the money.
- Typically structured under SEC guidelines.
✅ Reality Check:
- “No money down” doesn’t mean no cost. You’ll usually need to bring something to the table: expertise, connections, deal flow, or collateral.
- Lenders and sellers want assurance you’re serious—if not cash, then solid experience and a strong business plan.
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