First of all many other replies have raised valuable points and provided insight. Jason Hirko and Patrick L are on track.
Joe Splitrock and Chris Martin shared interesting creative finance methods that may or may not work for you or in today's market.
From my own experience it is possible to acquire property with no money as a down payment or out of your own pocket, but that is rare and the exceptional circumstances deal.
Creative financing methods have been proven to work but it is a case by case basis and ultimately if you are serious you have to be able to offer a reasonable sum of money to the seller to take the risk of holding a note which he still has to pay even if you default, with little to no real equity from you. Think about it, a seller has to be in quite desperate straits to hand over to you a property which may or may not be cash flowing and receiving zero dollars in return with a promise from you.
Realistically if you are charting a course to sail into an investment property 100% financed by the seller having zero skin in the game and no real experience in any aspect of multiple unit complexes, you are setting yourself up to be shipwrecked.
I would also add that you are going to waste a lot of good people's valuable time which costs them money. Do not be a time waster of either your own or others time. Work hard, save, invest and when the money you have earned and saved is substantial get into multiple units. In the meantime, read and study as much as you can about all aspects of this field.
Any legitimate real estate transaction of any substance requires attorneys to review and create contracts and deeds etc, earnest deposit money, substantial due diligence money for appraisals, surveys, environmental assessments (phase1 etc) and inspections. Plus you need to get your feet on the ground in that sub-market and I don't mean a weekend trip.
I'm sorry. I don't want to be negative and stifle your ambitions. You see the light and want to follow it, that is good.
Truth is it doesn't come free and easy it must be worked for. You might have to wait ten or fifteen years until you have earned the money to purchase. Don't go borrowing other people's money and lose it because of your lack of real world experience.
Better off starting with a duplex or triplex and working your way from there. Or as many units as you can afford to get into.
Occasionally you can get into 20 or 30 units with as little as 10% down and seller financing but that type of deal is not going to be a cakewalk. As others have noted: significant reserves to pay debt service of at least six months, capital improvement and/or deferred maintenance reserves are required for your own benefit.
Do not invest on a wing and a prayer.
This is my heavily abridged two cents.
I'm about solutions so I will give you a roadmap to achieve your goals:
Identify thirty plus units in your realistic price range. REO preferred.
Properly analyze and interpret all aspects of the property financials and that of other competitors in the sub-market.
Visit your sub-market competitors.
Learn the demographics and economic facts in that market.
Know the actual costs of labor and materials for the property's deferred maintenance and capital improvements.
Retain a top real estate attorney in that market.
Have 10% or more down payment. (Optional)
Have earnest money deposit.
Have due diligence money.
Make offer to purchase the holding company of the asset. (LLC) This is not a standard purchase and sale of real estate.
Receive irrevocable stock power for the holding company.
You are now legally the owner of the complex. Approach the local bank currently receiving rent deposits. Ask them to cash-out refinance the note the seller has given you on the property with enough to make capital improvements and have reserves. This usually only works if the LTV is under 70%.
Have an exit strategy.
Good success to all. Best wishes!
