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

I always make sure I have some skin in the game.I think this is most definitely the way for you to go.

A few keys to quickness: Your contractor should be ready to demo the day you close and own the propertyYour lender should be included BEFORE you close on the house so he can make sure the HUD is optimal for extracting all your cashI put the property up for rent about halfway through rehab, once it starts to have the GLOW of opportunity ;) overall it was pretty easy.  

Has to be the right fit of course and both partners need to have some skin in the game but win-win all the way.  

I was trying to consider some factors that may come into play - from what I understand you can put as little as ~3.5% down under an FHA loan - will it be more beneficial for me to put "more skin in the game" with the largest possible down payment I can make (say, closer to 10-15%)?

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.

References were pedestrian, not glowing, but not bad.

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."