Your strategy is great but there may be few problems.
With no down payment there is reason to believe you may have financing challenges. If you have been unable to save ANY money, becoming a home owner may not be your best option.
Where would the money come from to update the house you buy?
Have you discussed your situation with any lender to determine the price point you would be eligible to purchase?
You may find yourself in head-to-head competition with well funded investors who prefer 3/2/1 and who will buy quickly and with cash.
You may find spending some time in financially positioning yourself for a home purchase will prove very beneficial and save you a bundle of money.
Best of success in finding your new home.
All of Erath county is eligible for the no money down USDA mortgage. With the low interest rates and low annual mortgage insurance you really can't beat it. The program will also allow you to roll your closing costs into the loan as long as the appraised value supports it. This is a nice back up plan in case the seller can't or won't cover them.
The down side is that it does have the same requirements as FHA when it comes to the "condition" of the home. I bring this up because you mentioned foreclosures and in some cases they don't qualify.
The first thing you should do is contact me to get pre-qualified. You may find out that you qualify for more than you think and that you aren't relegated to just looking at foreclosures.
Barbara Coker, Licensed Mortgage Loan Officer NMLS#228545