What this does is give the tenant "some skin in the game". 

Would it be a good strategy to use his money as down payment or skin in the game with a hard money lender for a flip.

Just lay it on the line like you did here... its no skin off of their back to set you up on a constant contact e mail of new listings it is simple for them to set up... i get these in many states that I want to enter or I am working in.  

I am getting mixed answers-Some brokers are telling me I have to wait 6 months,-Some banks are telling me I have to wait a year.I am in Philadelphia, PAAny recommendations, suggestions or lender referrals will be appreciated.Thank You,   conventional financing you will have to wait 6 months per fannie mae.community banks, its depends some will allow you to cash out to 75% of market or up to 90-95% of Cost (they want to you to keep some skin in the game).

How would conventional lenders see their 'skin in the game' in this situation?

I would recommend the lease option approach with a healthy option fee.  

Unfortunately, with the rental landscape here in Seattle, WA area (it's scary aggressive and expensive), it's difficult to locate a place that will be available a month from now, much less 2-3 months (even if you pay a healthy deposit).Does anyone have any tactics they are willing to share to help alleviate my concerns of possibly having to live out of my car?

Continually showing many ways to skin a cat.  

Until I get the skin I put into this  from this house selling, I'm using the time to tweak this out.

I know I missed out on a great opportunity in my career because of it.Here you have an opportunity not only to make a healthy return, but partner with someone who sounds like they have a thriving real estate business.