I guess during the refinance time I was expecting to fork over 20-30% per property. if I saved all my rental income and extra from my full time, I'd be able to do that in 2 years Correct, any sort of fannie/freddie lender is going to require you to have skin in the game for each property. 

Most other flippers that buy more distressed properties pay cash from their personal funds, hELOC from other properties, or via hard money lender, but such a lender will likely want to see some flipping/rehab experience and investor/flipper "skin in the game" in the form of a hefty down payment.

@John Peters, There are a couple of ways to skin the cat but as you describe but it is also very possible that the transaction could actually destroy both your 1031 advantage and tax advantaged status on the other property unless that happens to be your primary residence right now.  

Hello BP,My wife and I have recently created our LLC and have been fortunate enough to have some skin in the game to start out.

@Abdul Rahman, having $20k as "skin in the game" DOES make a difference to my response.

If it's an 80% LTV loan, your skin in the game must be at least the other 20%.

They've got to either put more skin in the game that makes you whole or make it worth your while from a payment / cash flow perspective.  

The hard money lender will probably want to put a (2nd) lien on the property, and the title/escrow/attorney should disclose that to them.If you're trying to find it with a bank, I doubt even gap funders / private money would work because the bank wants to see your skin in the game as a borrower. 

While a 203K loan may make those concerns go away, you'd have to have really thick skin to do a short sale AND a 203K loan at the same time.

It may never happen, but nevertheless, I am determined for now to do what I can to find that one property which will allow me to start my journey into RE investment world.My advise to you is this: have a thick skin.