The seller could always accept this offer from this investor with the right to accept other offers.The buyer could perform all their due diligence and see if they still wanted it and if a sweeter deal came along the seller could bump them out.Could have a provision where to stay in the deal when the other offer is received the first investor buyer has to put up 5k non-refundable EM or they get kicked out.Many ways to set this up.The point is the seller should NOT lock up their property for no skin in the game.The amount of EM doesn't mean anything.Sending 50k earnest money but having umpteen provisions in there mean I the seller will never see the money.You tied up my property and if you don't perform other buyer who were interested could have closed on it and might have already used their funds to close on something else or the market could have dipped further,etc.As a seller I would much rather have 5k non-refundable knowing it will be painful for the buyer to pull out of the deal.Of course what you demand of the buyer is based on how many other offers you have and there terms and price.If you have a desperate seller with no action on the their property then you can get away with demands slanted toward the buyer.

With conventional loans, portfolioed loans held, they may allow an assumption, pretty rare today as it's better to originate a new one, otherwise it's an assumption with qualification, much the same process and the skin in the game may be an issue.

I have a policy of never being out of contract, much to the irritation of my escrow people and agents.

The IRS is irritating but not stupid enough to allow someone to convert a property when FMV is below their original purchase, and then conjure up a tax loss, surely that makes sense.Sell the house.

Find your niche, trust your gut, grow a thick skin and remove all negativity (like those saying your market is dead).

The best thing you can do starting out is partner up with an experienced investor for your first few projects to help you get some skin in the game.

If that represented true skin-in-the-game, there wouldn't be a need for Dodd-Frank regs.  

I was wondering do they require you to have some skin in the deal?  

If that's the case it's still a very irritating and unreasonable way for him to do business, and a clear breach of contract, but I can accept that reason without a lot of animosity.  

The bank would see that that you have little to no skin in the game and not be interested.