Cash to invest (enough for deposits, skin in the game lenders want you to have, closing costs, carrying costs, and to kick off rehab work).2.) 

It’s also water-resistant, making it great for any spills or moisture issues.

They told me they never trained for that, just reacted to save their own skin. 

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

And I generally require a sponsor that has full real estate cycle experience with little to no money lost, low leverage, high skin in the game and reasonable fees and promotes.However, other investors will look at these deals as bad/too boring for them because they are more aggressive and not concerned about the risks of default, refinance, interest rates changing etc.

Are moisture meters used or no?

Quote from @Bree Jimenez: There are many ways to skin a cat, but you should choose one way and stick with it until you figure it out or learn that it's not working.

Potential Equity is not skin in the game. 

You should use a moisture tester on all the lumber and make sure it is dry before drywalling. 

A nice looking finished basement will go south real quick with moisture and your tenant will soon be displeased (rightfully so) about the nice basement they initially thought they had.See what the market is doing, but also consider what your specific property factors are.