With this scenario we both have skin in the game: His work and my materials.

But it's in your interests to make sure the property value makes sense and the borrower has skin in the game.

They wouldn't have any skin in the game and could just walk away and leave you high and dry if things go wrong with the property.

it is technically a real thing but very rare, and there is plenty of historical data out there that shows those who have less skin in the game are at a far greater risk of default by a factor of 5-7x.

The lenders simply are not interested in financing a deal where the buyer has such a small amount of skin in the game.If you don't mind, can you touch on how you were able to obtain the type of financing structure that allowed for a seller-held 2nd mortgage? 

My experience has been that purchase transactions where the buyer has no or little skin on the game have a default rate many times that of buyers who place a significant down payment into the deal.  

Again, other might feel differently here.b) Skin in the game: as a conservative investor, I understand that the dirty secret of industries that the waterfall compensation is in the line with me and incentivizes sponsors to take more risk.

They have more skin in the game then you do.Make sure you get clear title.

One of my favorite authors, Nicholas Nassim Taleb, sold me on the concept of Skin in the Game and holding all pundits accountable for prior predictions, myself included. 

People with no skin in the game are telling you it is not hte blue mans fault even based on what you told them.