Wholesaling requires the least capital of any real estate strategy. You need: $500–$2,000 for earnest money deposits, $300–$500/month for marketing (direct mail or cold calling), skip tracing costs of $100–$300/month, and basic tools like a phone and CRM. Total startup budget: $2,000–$5,000. Many investors have done their first wholesale deal for under $1,000 out of pocket.
Flipping typically requires $30k–$80k of your own capital even when using hard money financing. Hard money lenders cover 70–75% of ARV but you need the gap between loan amount and total project cost, plus reserves. On a $200k ARV deal with $120k purchase and $40k rehab, a hard money loan at 70% ARV ($140k) covers most of the purchase — but you still need $20k+ for closing costs, gap funding, and carrying cost reserves.
BRRRR requires $50k–$100k of upfront capital that ideally gets returned through the refinance. The beauty of BRRRR is that the same $75k can theoretically fund 5–10 properties over several years if each refinance fully recycles the capital. The reality is that most BRRRR deals leave $10k–$20k of permanent capital in the deal — plan for this.
Buying conventional rentals requires 20–25% down plus closing costs — typically $40k–$60k per property on a $200k purchase. The house hacking strategy reduces this dramatically: FHA at 3.5% down on a duplex means you need $15k–$20k to buy a $400k two-unit property. House hacking is the most capital-efficient entry point for rental investors.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in Northern Virginia real estate for 20+ years.