So, basically, if you're splitting hairs over ownership percentage, here's the deal: Your partner dropping $40k on materials means they've got 25% skin in the game.

Thank you all for your input definitely looks like there is more than one to skin this cat.

Longer term, we could add additional cabins to the property (as stated above) since the current owners are sending overnight business to hotels in the area that are 15+ mins away.Our situation:We have about ~45% equity in my home (appraised at $775K about 6 months ago; we made some improvements but to be conservative, let's say this is still a good estimate), I can cash in my 401K, and have RSUs from my company that I can use for the majority of the cash I need to have "skin in the game" but it's short the 20% I will need for an SBA 540 for the real estate + 5% for the SBA 7a (this 5% for the DP is possible if the sellers can finance some of the business).

But most will shy away from little to no skin in the game in this market. 

You already know of this because you practice it, so I wouldn't let this one get under your skin. 

Ideally, the Borrower would make a single payment like they are used to and my Investor has security based on the hypothecated Note.Or, must/should I have Investor in 1st position with a Security Instrument and Note based on agreed to terms and then create a Note Rider for a Wrap Loan between my LLC and Borrower spelling out those agreed to terms along with a 2nd Security Instrument in 2ndposition.Example:Borrower Pays: 12% and 3 PointsInvestor gets; 8% and 2 points (spelled out in a Note)LLC gets: 4% and 1 pointPerhaps there are a number of ways to skin this cat but I’m looking for a simple, yet protective, approach for both Investor and LLC.Thanks,Steve

Even GP investment sometimes is not real investment if their skin of the game is coming from their parent or loan as well ( a LOT doing this).

No matter what, if this is your first investment property deal, you will have to have some "skin in the game" with anywhere from a 10% to 25% down payment, plus closing costs and required reserves.

Usually, they want you to have skin in the game. 

You're taking some of the risk or have skin in the game by handling 50% of the expenses.4.