How Do "No Money Down" Property Investment Deals Really Work?
- Stuart Chng
- Dec 22, 2025
- 5 min read
What Does “No Money Down” Really Mean in Property Investing?
There are several strategies commonly marketed as “no money down” deals. Some are legitimate when executed correctly, while others carry significant legal or financial risks.
If you’ve read my earlier article on finding fire-sale properties with built-in profits, consider this a continuation. If not, I recommend starting there to understand the broader context.
For readers short on time, here are the most common methods often labelled as “no money down” property strategies:
Taking an equity loan from an existing property
Forming a company to buy commercial or industrial property
Buying undervalued residential property and refinancing later
Buying under a younger borrower’s name using an older investor’s funds
Co-investing with friends or family by pooling capital
Purchasing at an inflated price with guaranteed rental returns
If you want the deeper explanation—including risks—read on.
The Mechanics and Risks of “No Money Down” Property Deals
1. Using an Equity Loan to Reinvest
How it works
This is one of the most straightforward and legitimate approaches.
First, you must already own a private or commercial property.
Next, check with banks to determine how much equity you can extract through refinancing or a term loan.
The funds can then be redeployed into higher-yielding opportunities, sometimes under a spouse’s name or a trust structure.
Key risks
Equity loans cannot be repaid using CPF
You must maintain sufficient cash flow to service the loan
Over-gearing, while more regulated today due to TDSR rules, still carries risks—especially if income is disrupted
2. Forming a Company to Buy Commercial or Industrial Property
How it works
Investors form an investment holding company (IHC) that owns the property.
Shareholders own stakes in the company rather than the property directly.
Because the company usually has no operating income, major shareholders or directors must provide personal guarantees for the loan. In some cases, investors who contribute funds may require those without capital to act as guarantors instead.
Occasionally, a finder’s share is allocated to someone who sources the deal without contributing cash.
Key risks
If rental income dries up or property values fall sharply, guarantors may be personally liable. In extreme cases, banks can pursue personal assets to recover losses.
3. Buying Undervalued Property and Refinancing Later
How it works
This method relies on finding genuine fire-sale properties.
Steps typically include:
Buying well below market valuation
Using a no lock-in loan to allow refinancing after 6–9 months
Refinancing at a higher valuation to extract built-in equity
When done correctly, this can allow you to recover your original capital, effectively owning the property with little or no money tied up.
Key risks
Requires significant effort and market knowledge
Over-leveraging increases financial strain
CPF cannot be used to repay the additional loan portion
4. Buying Under a Younger Borrower’s Name Using an Older Investor’s Funds
How it works
This strategy is sometimes promoted in investment circles but is not recommended.
It involves using the funds of older investors—who may have loan constraints—and purchasing under a younger individual’s name to avoid ABSD or extend loan tenure. A private agreement outlines profit-sharing arrangements.
Key risks
This is considered an arrangement to circumvent stamp duties and is illegal. Such agreements are legally unenforceable, and investors risk losing their entire capital.
5. Co-investing With Friends or Family
How it works
Close acquaintances pool funds to buy a property under one person’s name—usually the one without existing property ownership. Informal agreements then dictate profit distribution upon sale.
Key risks
Like the previous method, this structure is considered stamp duty avoidance and is legally void. If disputes arise, those who provided funds may have no legal protection.
6. Buying at an Inflated Price With Guaranteed Rental Returns
How it works
This approach resembles a car overtrade scenario, where prices are inflated so loan disbursements cover the full purchase amount. Developers may offer guaranteed rental returns (GRR) to attract buyers, often in overseas markets.
Singapore’s regulations largely prevent this practice locally.
Key risks
Inflated prices reduce future resale potential
GRR schemes depend heavily on the credibility of the provider
History shows multiple failed GRR arrangements resulting in lawsuits and losses
Final Thoughts: Do “No Money Down” Deals Really Exist?
Yes—they do exist in real life.
However, only a few methods are truly viable and relatively safe, namely:
Using equity responsibly
Buying undervalued properties and refinancing correctly
Most other approaches carry legal, financial, or relationship risks and should be avoided unless you fully understand—and accept—the consequences.
If this article helped clarify how these strategies work, feel free to share it with others who are exploring property investment. Being informed is the first step to becoming a more discerning investor.
Need an opinion on your property investment plans, the best buys available or help marketing your properties?
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Stuart Chng, Executive Group District Director at Huttons, is a renowned leader and personality in the real estate industry.
He adores music and can play a few instruments decently without upsetting his neighbours. When not doing so, he enjoys pillow fighting with his son and coming up with silly puns which barely amuses his wife.
Professionally, he is a licensed real estate agent, an avid stocks, options and real estate investor, business owner, team leader, speaker and columnist for several property newsletters and blogs and is often quoted in media interviews on 938FM, Channel 8, PropertyReport, PropertyGuru and other publications.
Throughout his career, he has helped many clients grow their wealth through selecting great property investments and managing their portfolios actively. Read his clients' reviews here.
Stuart has also coached many top million dollar producing agents from different real estate agencies in Singapore. Read his agents' reviews here.
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