However, the lower down payment means you have higher debt service on your larger mortgage and generally also means that you'll get less favorable terms on that financing (iow, if you have little or no skin in the game, you are a high-risk borrower -- perhaps higher rate, more points, shorter term?).

Great topic... so we have found the more skin in the game- the stronger the tenant.

The disadvantage to traditional financing is that you need to have more skin in the game in most places.I would not spend all your cash if you can help it.

It's called having skin in the game..

Perhaps, but depends on how much skin in the game you have.Looks like a spread worth doing to me.A few questions for determining to move forward would be time involved to get through the red tape in your area, how long from start to finish, any costs other than the dirt and $100 per sq. ft.Type of financing the buyer will be using.For a lender: Likely will not go beyond 70% of value, and if you plan to spec build, you may want to check out some local banks and see if you buy the dirt, perhaps they will do a construction loan and cut your lender costs in half.

As Ned Carey, your monthly cashflow amount depends on how much skin you have in the game.

They do want skin in the game (in my case 13K) and a lot of their fees are due at closing and are not wrapped up into the loan (11K).There have to be different examples of using hard money, this is based on what I was presented for a flip opportunity but I thought it might give you a rough idea of the hard money aspect, especially for newbies (my rate was higher because it was my first deal with them but they said it would drop after two deals 14% to 10%).Hope this helps and I'm sure others have better examples.

$2K is no skin in the game and most people will walk from a $2K investment when they hit a $3K repair.

Are you putting anything down as that usually is the basis to assess your skin in the game and your expertice, the assurances of professional management of the deal gets you over most issues, IMO.

But there's more than one way to skin a cat..