Buying Real Estate Without Going to the Bank

Buying Real Estate Without Going to the Bank

Is it possible to buy real estate without going to the bank?


I want to remove the old idea that it takes money to make money or that you need banks to purchase real estate and replace it with a more creative mindset.

Let’s start with banks. For centuries, buying and selling was done without the use of a lender. Once traditional brick and mortar locations were established as lending institutions money “seemed” to be available, for the first time, to everyone. However, it soon became clear that those who had the money had the power. It became more and more difficult for the average person to borrow and more and more expensive over time as well. You may have noticed the same thing in your business.

Depending upon your credit and your ability to plunk down 20 to 30 percent of the purchase price, you can probably qualify for six or seven bank mortgages that allow you to purchase investment property. Then most banks will cut you off.

Traditionally with banks, you’d need $80,000 down payment to buy four $100,000 houses. That’s pretty tough. Few people have the funds to do that. Even if you can, is it smart to tie up all that investment capital in only four rental properties? I wouldn’t do it in my business.

But rather than totally walking away from an inexpensive resource, this long-term financing may allow you to purchase your first few properties and create a track record that outside-the-bank lenders like to see.

The downside with banks is:

  1. They make the rules.
  2. They change the rules – often.
  3. They limit your investing options.
  4. You’ll quickly run into a debt-to-income imbalance and they stop lending to you.

The good news is that all the funding you could possibly need is available by applying some historically more common funding options. When you learn to leverage the “non-traditional” financing that’s readily available, you have the keys to the kingdom of wealth creation.

Which strategies allow you to buy properties without going to the bank?

  • Using the Seller as the bank (owner financing) – where do you find these?
  • Buying the property with a Lease Option – does that give you enough control over the property?
  • Negotiating then Assigning your contract to an investor
  • Using private lenders to create partnerships
  • Wholesaling to someone who wants to rehab rather than keeping it yourself
  • Borrowing private or hard money – for properties you don’t hold long term

These are just some of the techniques investors use everyday and I’ve written about most of them in this blog over the years.

If you’re new to investing and still think banks are the only way to finance, attend all the investment meetings you can, hang out with people who are doing what you want to do, learn about alternate ways to finance your investment opportunities and ask plenty of questions.

Think about it: If money were no object, how many investment properties would you buy? Think outside the bank!

Which strategies have you tried? What questions do you have?

This post has 2 Comments | Would you like to leave a comment?


  1. That’s fabulous, Rob. Get some experience there and, after a few properties, you’ll have enough experience to go for the other types of financing!

    Thanks for leaving your comment.

  2. Dear Karen,
    I am new to the Real Estate investment world. I have started my education and feel the only way for me to get started is without the banks.
    I don’t know how to go about getting private money..

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