How to Acquire Assets When You Have No Money

While it’s true that financial freedom is most easily achieved with capital to invest, it is possible to get there without having any money. In this article, I’ll introduce a concept that I’ve called Intelligent Assignment. Implemented correctly, it will allow you to do the following:

  • Accumulate assets without using your own money.
  • Avoid going into debt.
  • Build connections that will serve you in the future.

I’ll first use an example to illustrate Intelligent Assignment (numbers are rounded estimates for simplicity). Then I’ll discuss how you can employ it.

Intelligent Assignment in action

Let’s imagine that your goal is to reach financial freedom through real estate. You’ve read books and articles online about people earning fortunes from cash flow and equity appreciation. You’re aware that property ownership can come with tax advantages and can be leveraged with credit. It fits in perfectly with your goals, so you decide to pursue it.

The local real estate also has a lot of potential. You live in a neighborhood that’s rapidly growing because of the natural resources nearby. Businesses are moving there, jobs are being created and the population is expanding. Property developers haven’t been able to produce enough homes to accommodate the influx of people. Unless they build faster, price increases are inevitable. You want in on the action.

Since you’ve spent time studying real estate investment, you know to look for undervalued assets. Sometimes, the most rundown properties can be the most lucrative – and you think you’ve found your ugly duckling. Each morning on the way to work, you drive by a small, abandoned house. Its garden is shrubby and weeded, the windows are boarded up and the front door is defaced with black graffiti. It’s a dump, but you know it could be a cash cow.

Despite the number of people moving to the area, the house has been for sale for three months. It’s listed at $150,000, though homes on the same block have sold for well over $200,000. Developers are focused on modern condominiums downtown. Nobody’s interested in a dilapidated property like this one. And therein lies the opportunity.

You believe this house can make money in four ways:

First, you think that a rising tide will float all boats. If the local economy continues to expand, then property prices in the area will rise. Even a sullied asset like the one you’re eyeing will probably appreciate.

Second, the house is listed for $50,000 less than other similar homes nearby. Renovations would likely bring it up to par.

Third, you can probably find a tenant, who would pay down the mortgage.

Fourth, that same tenant would turn it into an income producing asset.

Based on your projections, the goal should be to buy the house, renovate it, rent it and eventually sell it. You think it might be worth $250,000 in a couple of years if the market continues to heat. In spite of what you’ve studied, though, you know you’re not a property expert. You’ve never even made an investment before. You also have no money and no credit history. All you have is an idea, which by itself is worthless.

But while you may be short in the cash department, you’re savvy enough to know that money is only a tool. You can buy the property using Intelligent Assignment.


Although you don’t know the first thing about tearing out floors or installing drywall, you have an old friend from high school, Tyler, who is a contractor. Tyler has spent nearly five years working on people’s homes and is constantly covered in dirt, soot and dust because of it.

You meet Tyler for coffee and explain the real estate opportunity to him. The two of you drive to the house and even peek inside through the wooden boards. The house looks disastrous, but Tyler thinks he could renovate it for $15,000. The issues appear to be aesthetic rather than structural, so it won’t be too costly. The property looks worse than it is. He wants in on the investment, too.

Unfortunately, Tyler also doesn’t have much cash. He’s had a job for a few years but never learned to manage his money. His salary is high enough, but he still lives cheque-to-cheque. You need to find someone who can not only make a down payment of 20%, but who can also come up with $15,000 for renovations and afford a mortgage. Tyler can’t help much with that.

The two of you make a deal. You’ll figure out a way to purchase the home. After it’s bought, he’ll then handle the renovations. He’ll repaint the walls, remove the graffiti on the outside and install new cabinets in the kitchen. That should take about three months. In exchange for his efforts, Tyler will receive 10% of the net rental income and 10% of the net proceeds after the house is sold.

The down payment

Now that the renovations are covered, your next step is to come up with a down payment. Fortunately, you spent each Thursday for the past three months attending free real estate seminars. You met a lady there, Vanessa, who has plenty of cash. She’s not rich, but has money available after recently selling one of her properties. She’s searching for a new investment.

You approach Vanessa with the deal. You explain that the house is listed for $150,000, but it could sell for 60% more with renovations. Until it does, it will serve as an income property. Vanessa agrees to provide $63,500 in exchange for 50% of the net rental income and all of the net proceeds from a sale until she’s recouped her money, plus 15% per year. Her capital will be used as follows:

  • $30,000 for the down payment.
  • $15,000 for renovations.
  • $18,500 for ancillary expenses.

The mortgage

With the down payment and renovations ready to go, all that’s left is to find someone to assume a $120,000 mortgage. A result of your networking efforts, you meet David, who will apply to the bank for one. He’s got a good job, little debt and a great credit rating. He will surely qualify.

All David has to do is secure a mortgage, combine it with the down payment and use it to buy the property. Vanessa will make the mortgage payments for the first three months. Once the house earns rental income, it will be used to cover the remaining payments. Since the property will technically be in his name, David agrees to sell it once it reaches $250,000.

To compensate David for his efforts, you’ll pay him $10,000. You also agree to co-sign for the loan. In case the deal fails or the bank recalls the mortgage, you will be on the hook for it, too.

Assembling the deal

It’s taken a couple of weeks to find the right partners, but your team is now ready. You can finally buy your first investment property. After paying 50% to Vanessa and 10% to Tyler, you’re set up to earn 40% of the net proceeds from the opportunity. Here’s what it will look like:

  1. You hire a lawyer to formalize your arrangements with Tyler, Vanessa and David. The lawyer acts in the interests of the group, rather than representing any individual party. Vanessa pays $5,000 for his services.
  2. Vanessa transfers $40,000 to David for his fee and for him to use as the down payment. He applies for the mortgage and uses the funds to purchase the house.
  3. Vanessa transfers $15,000 to Tyler for him to purchase the material need for refurbishments. He spends the next three months renovating the property.
  4. Vanessa transfers $1,500 to you. You’ll use that to make the first three months of mortgage payments while the property is under renovation. David has given you his account information, so you’ve just got to transfer money to him each month.
  5. You secure a tenant who’s ready to move in as soon as renovations are complete. The tenant pays $700 a month to you in rent. You pay $500 of that to David to cover the mortgage, $100 to Vanessa (50% of the net proceeds) and $20 to Tyler (10% of the net proceeds). The remaining 40%, $80, is yours to keep each month.

Two years later you list the home for $250,000 and manage to sell it. During that time, your tenant paid down $5,000 of the mortgage. After taxes and repaying the bank, the net proceeds from the sale are $133,000. The monies are divided as follows:

  • $82,550 to Vanessa.
  • $13,300 to Tyler.
  • $37,150 to you.

Now that you’ve given Vanessa a great return on her investment, she’s interested in doing a similar deal with you. This time, however, she wants to invest more money into a bigger property. She also has a friend who’d like to invest, if you’re willing to do two projects simultaneously.

How you can use Intelligent Assignment

Intelligent Assignment is the strategy of outsourcing your weaknesses to competent partners. It’s frequently used by experienced entrepreneurs; in real estate circles it’s sometimes known as “creative financing.” In the example above, you didn’t have capital, credit or hands-on skill. But in return for assembling the deal, managing the property and administering the overall project, you secured 40% of the proceeds from a lucrative piece of real estate. You were a dealmaker and put money in the pockets of Vanessa, David and Tyler. You were thus paid handsomely for your services.

The most powerful aspect of Intelligent Assignment is the ability to scale. In the foregoing example, you acquired only one small house. But if you continued to offer good returns to Vanessa, and now her friend, you’d then likely be able to attract additional investors. Tyler and David both earned a profit and would probably want to work with you again. With enough partners, you could literally purchase dozens of units at a time. That’s how fortunes are made.

Intelligent Assignment can be applied to any business. Simply identify your shortcomings and assign them to other qualified parties in exchange for a piece of the deal. For instance, if you need marketing expertise, could you entice a social media pro with a portion of your company’s earnings? It’s akin to hiring help, but your team only gets paid if the venture is successful. There’s no rulebook for implementation. The only limits are your imagination and savvy.

Read more: The Best Businesses to Start to Reach Financial Freedom

Keep in mind, however, that Intelligent Assignment is an advanced concept. You are managing personalities, money and time, which can be difficult. As well, there may be certain laws that govern how you employ it, especially if you’re involving investors.

Before using Intelligent Assignment, you should:

  • Be a skilled manager and leader.
  • Learn from your partners. Their skills are the reason you’re giving up a portion of the profits.
  • Have a lawyer formalize your arrangements and provide advice.
  • Be up-front with your partners about the deal. Don’t mislead them or inflate your expectations.
  • Make it lucrative for everyone.
  • Only work with trusted and competent partners.
  • Have an arbitration procedure. If there’s a disagreement, how will it be resolved?

This strategy is one of the best ways towards financial freedom. But like anything else in life, Intelligent Assignment demands effort and skill. You’ll also need good partners for it to work; I’ve got an article here to help you find them. You should also read this to prepare for questions that investors may ask. Done correctly, you can use Intelligent Assignment to acquire income producing assets without using your own money. It removes a major barrier to creating wealth.

About The Author

Alexis Assadi

Alexis Assadi is an investor, entrepreneur and writer, who advocates for making high-performing income investments and the lifelong pursuit of financial intelligence. He is a shareholder and director in three companies that provide funding to small businesses, entrepreneurs and real estate projects. His most recent venture is a firm called Pacific Income LP.

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1 Comment

  • Liz A

    Reply Reply January 4, 2017

    Hello Alexis,

    I just want to extend my appreciation for you writing the article above. I have worked in the real estate industry for many years and have witnessed many transactions where capital gains have been made. Due to my current situation I am not in a position to offer any cash to reinvest and I have longed to participate in real estate investments to become closer to financial independence. You have provided me with knowledge and inspiration to attempt Intelligent Assignment. I hope to follow through the steps you written and share my story one day.

    Thank you!


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