Aside from using better criteria to underwrite their loans (increased DSCR ratios, require higher occupancy levels, no cash-out, skin in the game, pre-sales, etc.), lenders now want the borrower to commit to the loan by personally guaranteeing it.

To put it simply, I’ve been told that I do not have enough skin in the game myself in order to cash out some equity.We bought the seller financed with only a $30,000 down payment.

So it may be costing you more than just putting some skin in the game and recouping it back on the refinance or sale. 

I would basically be paying 7% interest on that money that I put aside... but I figured that if I save that much than I would at least have some flexibility to contribute to a joint venture if I got a business partner to put most of the capital in but then I would also have a little skin in the game.

They typically want to see some "skin in the game".

the downside to realtors is they have ZERO skin in the game.

They all want to see some of your own skin in the game. 

As a new investor / aspiring developer learning the ropes during this excellent time to be buying RE, I can tell you for certain it is FAR cheaper to re-skin a quality property than it is to build it.

But you need to have some skin in the game.

It's basically colored vinyl chunks set in clear vinyl, so there's no "skin" to tear like cheap vinyl flooring.