How to Start a Business with no Money Down


The dream of many is to be their own bosses, work few hours per week, and have the chance to spend the rest of the day doing the things we are passionate about. But as the say goes “work hard and you will become rich.” Does this say really work?

It is true that working hard is a good thing, but do you really want to work hard all your life and then reap the benefits (maybe) later in life? When you are too old to enjoy anything at all? Therefore although working hard is the prerequisite, working smart is the nonlinear enhancer that can bring most of the benefits. Thus, where do we start?

Ideas are overrated

The past has been built over ideas. Ideas have changed the world; ideas are the foundation of business. Is this really true? In part it is, although we like to believe that great ideas change the world, and that those who are able to conceive them will thrive, this is half of the story.

Of course, that sounds very poetic, but how far from the truth is that? We humans are hard-wired to have ideas, as Thomas Edison used to say, “I pull ideas out of the air.” Therefore creativity is far from being something special but rather something common to all human beings. Thus, why some ideas succeed while others don’t?

From Theory-land to reality

Many of us have the feelings at all times that people stole ideas from us. It may not be rare for some of us to have the feeling at times to have thought about creating Tesla or SpaceX even before Elon Musk did.

With hindsight the idea of creating a company, which produces electric cars, makes a lot of sense and of course many of us knew that electric cars would have been successful sooner or later. But then why didn’t any of us start a venture called Tesla?

What really makes the difference between an idea, which succeeds, and one, which does not, is actually the willingness to test that idea in the real world, therefore to transition from theory-land to reality. Elon Musk had the willingness to test ideas that seemed to make sense in Theory-land but that are very hard to prove in the real world.

Are ideas really in the air?

Thomas Edison before discovering one of his greatest inventions, the light bulb, had to actually try and fail 10,000 before finding out what worked and what not. Real story or legend, the point here is that ideas are worth nothing if there aren’t people willing to test them out, while being ready to fail many times before that idea may work.

In addition, history has shown us that many times great inventions come out of serendipity rather than a preconceived plan. Take Christophorus Columbus, which was persuaded to navigate toward India before finding out to be on a new continent (although we are not sure if he ever realized he was in America).

In other words, sometimes to revolutionize the world there is no need for an idea, but rather the willingness of few men to bring an already existing idea to reality. But who are those adventurers, which are willing to take the leap?

Welcome to the entrepreneurial age

We all assume that history goes from ebb and flow and in part this is true. In ancient history, although Greeks were the fathers of our civilization, Hellenism (the diffusion of the Greek civilization) happened thanks to Macedonians, a small, barbarian (Greeks called everyone’s barbarian) population, located North of Greece.

Indeed, while Greeks lived in Theory-land for many centuries, Macedonians and in particular Alexander the Great in just few decades spread the Hellenism throughout the ancient world. Alexander the Great was just one of the main examples in history of people with the entrepreneurial mindset.

Another myth to bust is that to be an entrepreneur you got to change the world! Although Alexander the Great revolutionized the known world (at that time), to become an entrepreneur there is no need of such extravagant plans. Many opportunities lie in front of us and we don’t even realize.

The opportunity is right there

If I asked you, “what is the best way to go from A to B?” You would mock me by thinking how trivial this question is. After pausing for few instants you would answer without hesitation “of course through a straight-line.” Although many of us get the concept in Theory-land few of us actually apply this concept in reality.

This is due to our domain dependency. In short, we seem to be able to grasp a concept theoretically but then we seem not to be able to bring this concept in the real world. With no surprise many academics may have an incredible expertise of their subject, but no clue of how that subject applies in the real world.

Therefore, the point here is that you can start in this moment to be an entrepreneur if you have the willingness to do so. I know what is the first objection you are going to move is, “Hey man, all you are saying here is very cool, but how am I supposed to start a business if I have no money?

Nothing down

Robert Allen in his book “Nothing Down” tells us how to start a real estate business with no money down. On the other hand Robert Kiyosaki also tells us what are the principles to follow to become a real estate investors.

Few principles are important when starting as a real estate beginner investor. Three of those principles are:

  • You have to buy your real estate at 30% discount (at least)
  • You are not buying it for yourself
  • A property is an investment just if it has positive cash flows

As for the first point, anyone would agree with that. But how can you find a property, which is selling at a 30% discount? One of the most basic principles, which amateur investors seem not to grasp is that you have to make a deal when you buy rather than when you sell.

In other words, most amateurs make the mistake of buying properties and hoping them to increase in value overtime. Indeed, you do not have to accept the price set by the seller as given, but rather to challenge that price.

Good real estate deals are available at anytime. Therefore, do not get emotional if you are losing what it seems at first to be a good deal. Sure enough you will find an even better deal moving forward.

How to find good deals? You have to find a motivated seller, someone who is trying to cash out, and that would accept 30% to 50% less on the property. Although occasional, those cases are less extra-ordinaries that you might think.

Here we go to our second point, which is “you are not buying the house for yourself.” Too often when buying a property prospective buyers get too attached to it and they end up living in the property rather than treating it as an investment. Thus, once you buy the property, rent it. The property is a tool to become financial free. Let the property work for you rather than you sacrificing your life for the property.

The third and crucial point that few really seem to understand is that “the property is not an investment unless it generates future cash flows for you.” In other words, assuming you buy an apartment for $150,000 and get a mortgage for the full amount; assuming a monthly rate of $1,000 you want to rent the place out for at least $1,200. In short, the rent has to cover for the mortgage monthly rate plus all the other expenses, so that eventually will have a positive cash flow.

Millionaire in three years

If we continue our thought experiment, and buy several apartments with the above method, eventually we may end up with few apartments, which also generate positive cash flows, in three years time. Then, why not using the equity of those apartments to actually buy an entire building? Although it all seems so easy, it probably is.

Not all that glitters is gold

Let’s clarify; both Kiyosaki and Allen were able to build their wealth on real estate (at least that what they claim) but also through their training companies. Therefore, for how much we can trust their judgment we have also to admit that strategies, which work in US, may not work in other countries.

Although, the three principles explained in this article can instead be applied to any real estate deal. Therefore, the point here is for you to change your mindset before approaching the real estate market or any other kind of investment. But the central point is that you got to act rather than  wait for that revolutionary idea to come.


To know more about real estate investing check out:

Nothing Down for the 2000s: Dynamic New Wealth Strategies in Real Estate, Robert Allen

The Real Book of Real Estate: Real Experts. Real Stories. Real Life, Robert T. Kiyosaki

The Four-Week MBA is an online community which purpose is to share educational resources. Therefore, the information contained in this article is not meant as an investment advice. 

Published by

Gennaro Cuofano

Creator of | Head of Business Development at | International MBA

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