The reason for this is to prevent people from getting a good deal, immediately refinancing, pulling all of their cash out, and having no "skin in the game".

In theory you could approach the neighbors before going under contract but they will take your inquiry more seriously if they know you have skin in the game.

Would depend on if you have enough skin in the game or other collateral

Insurance has no skin in it since they don't cover mold, only have duty to defend. 

You must have thick skin and the ability to laugh when things seem like they’ve gone wrong.We know there are more than 15 things you need in the home, so comment below of there's anything you would add to the list.I CAN HELP with a a few of these items too!

It may have been possible years ago, but not anymore--lenders want to make sure that you have skin in the game and that you won't just walk away from the property if things get tough.

Should I insist he put skin in the game up front as well and we both take our chances on losing money?

I am very sensitive to this because I have people that are close to me that are in places like this.

Not complaining or saying you guys are doing anything wrong, just disclosing my bias for working with partners who are responsive and accessible and how this is a sensitive area (for me) that greatly influences my decisions when choosing to work with someone or not.

You're the one with skin in the game here.