Despite what the pundits say, it is impossible to buy real estate with no-money-down, but it is not impossible to purchase real estate using someone else's money.
Even if someone were willing to lend you 100 percent of the purchase price of the property, there are still costs associated with acquiring the property. There are transfer taxes and recording fees that need to be paid. Maybe you won't be paying these costs, but someone will. Don't overlook things like casualty insurance. A policy needs to be purchased, and someone has to pay for that insurance. The point is that it does take some money to buy and sell real estate.
USE as little of your OWN MONEY as Possible!
As a real-estate investor, you always want to use as little of your own money as possible to buy and sell properties. Holding on to your cash is always desirable. No-Money-Down is always a goal!
Often you will make decisions about acquiring new properties based on how much cash it will take to purchase it. You are likely to pass on properties that will take too much of your cash to complete the acquisition. This holds true of properties in pre-foreclosure status and those that have been foreclosed.
You will need to use either your own money or someone else's to make your real-estate transactions work. Whether you can convince others to pay the required fees and arrange financing without any down payments will determine how little cash from your own funds you will need.
But let’s take a look at a few options that might be considered NO-MONEY-DOWN.
You will still have to make an earnest money deposit, something like $100 - 1,000 is common, $500 is standard in most states (this money is not refundable, and basically it sets you up a reasonable amount of time to close on the property, you pass that date, the bank takes your money). Earnest money is not required for the transaction. It is simply a guarantee that you intend to fulfill the deal. And, with any Buy/Sell agreement properly written earnest money actually is indeed refundable.
FIRST TIME HOME BUYER
If you are a first time home buyer you can potentially utilize an FHA (Federal housing administration) Loan. You can purchase a property with "Zero Down," zero closing costs, and it will more or less be tacked into the mortgage (and you'll end up with .5 - 1.0% higher interest rate than market is yielding for your credit type). The property however must pass specific guidelines, you will not be able to utilize this financial product if this house is in need of repair (foreclosed homes and fixer-uppers are two separate things).
Use a credit card. You can technically, (legal, but falls in the grey area) do credit transfers, but you will eventually have to pay off the credit card. This is usually done on an investment property after you have obtained the house and then sold it again at a profit to cover your total cost plus interest accumulated.
Credit card rates are almost always much greater than mortgage interest rates. Experienced mortgage brokers and lenders can help you with 100% financing on any property including foreclosures whether they are bank owned, lender owned or government owned.
There is no secret to No-Money-Down foreclosures. While credit card advances to purchase property are by no means in a grey area provided you are either (a) indicating that your down payment is borrowed or (b) getting a large enough advance to pay "cash" for the property it is not very smart unless you have a credit card with an interest rate below about 9% amortized for 30 years. I don't know of a credit card amortized for 30 years.
I personally use a home equity line of credit. This enables me to purchase homes outright as if for cash and usually the minimum payment that I have to make covers the interest on the loan. Of course the danger that if you default, you put your own home in jeopardy! So caution is needed here. I used to ask my wife, (about the Foreclosure we were working on), “Could you live here?” Then she would answer, “If I had too!” Because the foreclosure is paid for while your lien is on your principal dwelling, which puts it on the line. Anyone can learn how to buy foreclosures with no money down; all it takes is a bit of research.