If she has and the building burns down you might have a liability issue.  

Short Answer = Yes it is Possible and I know several people who have done itThe Long Answer = The only way I have seen people with no money get started in Real Estate Investing and be successful long term is to get very good at finding motivated sellers.If you have no money, no credit and no experience but you have the Super Power of finding and attracting Motivated Sellers I promise you that you will also attract deep pocket investors who will partner with you, give you finders fee's etc.You see the hardest part for most people is finding the time to seek out motivated sellers as you could talk to 500 people before you find even one possibility and for most people they give up after the first 50 No answers.I wanted to share this with the new investors as I have seen too many of you get excited and burn out with no progress after 6 months. 

Buying a house (putting it in a contract) to find out from my end buyer that the home was burned to the ground after he did a site visit. 

And I am in between careers, trying to figure out how I will make a decent living and not burn all my cash on life expenses.

Sounds like that borrower wasn't upfront, I'm definitely looking to build bridges rather than burn them.

The guy also has a candle, and I'm terrified he'll accidentally burn the place down one night.

Sell the property, drop the downpayment, turn & burn & increase your return/monthly income. 

Cash flow guys always tell me appreciation guys tend to get burned, and appreciation guys tend to say cash flow guys will hurt in the long run.

If he wants to stay, he will stay long enough to burn the security deposit if he decides not to pay. 

I got burned pretty hard years ago so I have been hesitant to re-enter the real estate realm.