You usually have to have some skin in the property in order for them to lend to you.

This structure first compensates either partner for skin in the game (kind of like you would otherwise need to pay for private money), then splits rest.On the legal structure, sounds like you'll want to set up an LLC, along with an operating agreement that specifies the different duties you each have, all the stuff you agreed on deal structure above.

Except for small local banks and credit unions that keep skin in the game (portfolio loans), doesn't the bank want the loan to go through so they can flip it over to Wall Street for securitization?

Depending on how well you know him I would also recommend thinking about having him invest some money in it too so he has "skin in the game." 

For those that comment whether positive or negative, you don't have skin in the game.

Essentially your “skin in the game” so it cannot be a loan from a bank, friend, family member, etc.

(we will both put even amount of down payment -skin in the game)  Can we both apply for the loan or is it better to have one person finance? 

(yet) But if I were in your position, I would be sceptical of renting to anyone that doesn’t have a bit of skin in the game.

If you did this and either held it for a year (I️ believe that is the standard, but I️ would confirm with the banking institutions you want to go with), you could then refinance, pay off your land contract and pull cash out if appraisal came back higher.Your original thought process is correct in that a bank wants the 20% (I’ve seen closer to 25-30% on commercial loans until you build relationship) to protect themselves from fluctuations in value, but they also want skin in the game.Good luck,Roger

I'm sure I would have to put some skin in the game and would be able to have a couple hundred thousand available if needed.