There's more than one way to skin a cat."

Your $3 to $5K down payment does not equate to 10% down and most sellers would be more comfortable with more skin in the game on your part.

This is going to be a very blunt "Come to Jesus" post, if your skin is feeling thin today then please stop reading here. 

It's extremely helpful to read a brief summary of your experience during the last downturn, how your strong cash position saved your skin, and now to hear your perspective on this one...

Exactly right @Wade Sikkink, @Troy Feldman any investor who is smart with money ain't gonna trust a guy with no skin in the deal! 

I think it's important that you have some skin in the game, just to put that out there.  

I thought this was amazing, as typically they want to see "your own cash" in the deal as skin in the game.  

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.

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".