picture source: truthortradition.
I was earnestly studying John 3, as it talks about what it means to be born again which is the only means of entering God’s kingdom. Every Christian who cares about his/her salvation should therefore, by all means, try to understand this concept.
The more I examined this text, the more things I started to notice.
In this whole narrative, Jesus is not trying to confuse Nicodemus by talking in some sort of mysterious way but rather, over and over again, He is trying to make things clear to him. Let’s start with verse 2b, to get right to the point.
"... for no man can do these miracles that thou doest, except God be with him." - John 3:2b (Italics mine.)
"... Except a man be born from above, he cannot see the kingdom of God." - John 3:3 (I used the second rendering, which is the same as "born again" in Greek. Italics mine.)
Do you also notice a pattern here?
Nicodemus: man without God (100% man's part, without God) + God with him (100% God's grace, 0% man's doing)
Jesus: man born from above (100% God, 100% grace) + he cannot see (100% man's part without God)
In essence, Jesus says to Nicodemus: Yes, Nicodemus… concerning miracles; a man can’t perform those on his own. So can you see that if God doesn’t make you born again, you cannot become part of God’s kingdom? (A statement in favour of 100% grace/against works salvation.)
Nicodemus takes the sense of Jesus’s saying as “born again”, which is also correct, but this reply shows that he didn’t yet grasp the pattern which Jesus tried to show him, as the pattern, in verse 4, becomes:
Nicodemus: can he (a man) enter the second time into his mother's womb (100% man's doing, 0% grace)
Nicodemus did not understand that one simply does not allow himself into God’s company by working hard enough / without God’s grace! Read Romans 4:2-4 (!), Ephesians 2:8-9 and Ephesians 1:6-7.
Therefore, Jesus tries to get him back into the pattern, by making an even stronger declaration of this pattern (as we shall see later on). Let’s check the pattern in the following verses:
v5: we will write this verse later on in this article.
v6: Jesus: born of flesh is flesh (a symbol which stands for man without God) + born of Spirit is Spirit (100% God's part, 100% God's grace) => welcome to the kingdom of God
v7: Jesus: ye (men without God) + must be born again (100% God's part, by grace. God is the decisive factor.) => kingdom of God
v8: Jesus: wind; beyond man's understanding and outside of his control (a symbol which stands for the Sovereign Holy Spirit, who is not obliged to save anyone, 100% God, 100% by God's grace) <= Comparable to => everyone that is born of the Spirit (100% God, 100% by God's grace)
Considering the context (of John 3:5), do you think that Jesus will interrupt this pattern by talking about water baptism, which is a sign conferred to us by other men? What does being born of water (and of the Spirit) mean in this verse?
A possible interpretation is given to us in Titus 3:5-7:
"Not by works of righteousness which we have done, but according to his mercy he saved us, by the washing of regeneration, and renewing of the Holy Ghost; Which he shed on us abundantly through Jesus Christ our Saviour; That being justified by his grace, we should be made heirs according to the hope of eternal life." - Titus 3:5-7 (emphasis mine)
So instead of taking the verse we were considering (John 3:5) out of context, we can see the same pattern here. Jesus is trying to emphasize His point even more, so that Nicodemus would not make the same mistake! His mistake was that he interpreted Jesus’ words in John3:3 wrongly!
Titus 3:5-7: washing of regeneration (= 100% God) + renewing of the Holy Ghost (= 100% God) = justified by His grace = heirs of eternal life = John 3:5: born of water (= 100 % God) + and of the Spirit (100% God) = he can enter the kingdom of God
Instead of instituting the sacrament of water baptism and declaring it to have some sort of salvific value, the context shows that, in this passage, Jesus wants to emphasize those parts in man’s salvation that are 100% God’s. Nicodemus’s (own) works are simply not good enough. He needs to take his faith (trust) off of his own works and he needs to put it on Christ(‘s grace), by which He receives God’s gift: salvation. 
"For by grace are ye saved through faith; and that not of yourselves: it is the gift of God: Not of works, lest any man should boast." - Ephesians 2:8-9 
"Not by works of righteousness which we have done, but according to his mercy he saved us, by the washing of regeneration, and renewing of the Holy Ghost." - Titus 3:5
For more information on justification by faith and/or justification by works, check out this article.
For more information on whether salvation is synergistic or monergistic, check out this article.
For more information on whether faith and repentance are God’s gifts or man’s choices, check out these articles.
To learn about the different rituals of baptism between mystery cults and early Christianity, check out this article.
You can read for free about the evolution of infant baptism and related ideas in this republished book from 1912 (download is also free).
 A proper reading of Ephesians 2:8-9, in Greek, shows that “the gift” refers to salvation and not to faith (trust). It is man’s duty to put his faith (trust | his part) in God’s grace (God’s part), offered through Christ(‘s atonement) (also part of God’s part).
Jesse Morrell put it this way:
‘“τοῦτο” [that] is a neuter demonstrative pronoun. But “πίστεως” [faith] is feminine. This is vital because when Greek demonstratives modify nouns, they will agree with the noun in gender, …number and case. And so “τοῦτο” [that] is not in reference to the “πίστεως” [faith] plain and simple. “πίστεως” [faith] may be the closest to “τοῦτο” [that] but that is not how you determine its reference in a Greek sentence. The endings of the words that are how you do that. The gift cannot be “χάριτί” [grace] as that is feminine also. (…) In plain English, Ephesians 2:8-9 is teaching that salvation is the gift of God.’
– Jesse Morrell, “Is Faith the Gift in Ephesians 2:8-9? Greek Exegesis” (biblicaltruthresources).
Also, William Birch wisely wrote:
“God does not implant faith into a person (whatever that would mean), for faith is neither a substance nor an object that can be given, but refers primarily and properly to the response of an individual to the work of God in Christ through the Spirit, resulting in an active trust in the atoning and justifying work and merit of Jesus Christ at Calvary and in His resurrection.”
– Will Birch, “Who Saves Whom? Does Faith in Christ Save Anyone?” (Williambirch).