This way he has skin in the game and an incentive to close the deal, because otherwise he will loose his EM.I look at it this way: if you get the deal then good for you, if get burnt you will learn a huge lessen on a small deal that will benefit you for the rest of your life.

Since the rehab guy doesn't have skin in the game and already took the cash out split, they can just walk away, leaving the money guy to pay for that extra $18000 that was given to rehab guy. 

Because of the current lack of inventory, you're going to be competing with dozens of savvy agents marketing for listings, as well as the wholesalers who've been around for years with a lot more experience and skin in the game.

I will tell you just from my experience any hard money and banks i have talked to told me I will have to have some kind of skin in the game.  

@David Dye Thank you for the positive advice.These are great points about paying for the lack of equity or skin in the game on points!

This time home owners have skin in the game. 

Not really sure how to do it.So for example, I bring in 5k for skin in the game with an agreement that I will manage all properties for a fee and handle repairs and maintenance for x amount of equity a year toward the properties.

I thought as long as entities had proportionate skin in the game, it was ok.My SDira presently owns 100% of a property that I purchased a number of years ago.  

If someone is short on experience, they need to have more of their own money (skin in the game) into the deal, and a very solid deal. 

I suspect they make a good amount of their revenue on flipping dreamers who risk the 3k.but if you think about it from Do hard monies point of view for sure they are going to be ultra conservative I don't blame them and they are only going to fund screaming deals where the borrower has Zero skin in the game other than the  3k and 600 fee and there are most likely other little fee's like title and escrow.. but show me a beginner who can land screaming deals.. sure some will stumble on them. but in my 40 years of lending HM most beginners have no clue as to what a deal is.and therefore this company is killing it making 3600 on turn downs.. pretty sweet if you can get away with it.