Would this be a Security issue? 

Personally, if you can't come up with a 3.5% dp for a 200K property, you are not ready to buy a house yet....I feel that if you can't come up with 20% it's the same, but if you have stable income in a secure field, the 3.5% down payment may be worth the risk.

It sounds like this would be considered a personal loan, secured against the house.

We recently secured a property in hopes of finding a money partner, with us being the working partner.

Wouldn't it make more sense to get the pre-approval first that way when he identifies the target property and puts an offer in he can tie it up, do 14 or 21 day loan contingency and use that time to secure the loan?

All security deposits held by the seller are transferred to the buyer at the time of closing.

Scott,There are several items that you need to think about; common area cleaning, common area utilities (electrical at least), laundry room upkeep, fire alarm servicing and possibly monitoring, etc.

Equity Build and EquityBuild Finance are being sued by the Securities and Exchange Commission for running a Ponzi scheme. 

Most times just putting some type of secure cover on it will suffice as it's usually an insurance company concern.

If you don't have any credit yet (car loan, credit card, etc) a good place to start is getting a secured credit card with your bank, which should help you start building a credit report and score.