It can be as little as $1 or a really substantial amount - typically a similar amount as earnest money.With an option you know that you will be able to buy the property as agreed and the seller doesnt have to worry about finding another buyer, as they have collected an option fee you would not want to loose.

what folks who have not really owned a mortgage or hardmoney company like I have don't realize is.   20 to 25% equity coverage is not near enough in a default scenario unless the asset has gone up substantially from when the loan was made. if the value is static.. you will lose principal.. in most cases if you only have 20 to 25% equity coverage..

Assuming all rents are substantial they should be able to cover my debt service and any other expenses needed (repairs, water, vacancy, cap Ex, etc.) 

The credit score and down payment requirements are substantial and the rate sucks but if it's a good enough deal you don't want to lose it over a bad rate.

I have a considerable amount of equity in my home and my best friend of 30+ years is interested in putting up a substantial amount of money to be a silent partner.

They may have added 1 risk but nothing substantial. 

Acquiring real estate with a mortgage substantially increases the cost of acquisition. 

This is a different type of risk ultimately forcing their lending decision to be substantially more conservative. 

Expecting "instant equity" requires you to either buy below market rate, or you will have to force appreciation by making substantial capital improvements as soon as you buy. 

It can generate substantial passive income for you.What Exactly Is Passive Income?