This is not to be be disparaging, but statistics show those who have no "skin in the game" are more likely to abandon the enterprise if things turn difficult. 

Compensation may be allowed to borrowers who got skinned in sub-prime loansNew compliance requirements for lenders, in origination, modification, servicing, compensation, servicing and property retentionGee, I think that pretty much covers it, besides the state requirements. 

I don't really see that much of a risk especially since they have no "skin" in it - only their name on the note - when you add to that they're only having their name on the note for 2 years or less and theyre getting 7k for it I thought it sounded like a good deal - but maybe not thus why I posted.As for my getting an additional mortgage my DTI isn't good enough with my current job. 

There's always more than one way to skin a deal.

Most hard money lenders will offer rehab in fund control, they typically need the borrower to have 20-30% skin in the game however, if you can do this thats a great option.

There are a number of ways to skin this cat.Lastly, If you are going to embark on the process of trying to generate income for your retirement doing flips, you may want to consult a licensed attorney, CPA or financial advisor who can walk you through this. 

Agreed, there are many ways to skin a cat... 

The decision to create an LLC, in my opinion, comes down to your current/projected financial future.Scenario #1: You are buying your first investment property at $250,000 and secure a loan of $225,000 - you don't really have much skin in the game.

Cons: Most require some "skin in the game" and you won't get 100% loan for the property and the rehab, they will want you to have some of your own money in the project.

This is irritating to renters but it might space out any attrition you get...Good Luck!