I didn’t want to have to put the full 20% down so I went to 2 local banks that I had worked with before and said I wanted to do 10% down and they could put one of my free and clear houses on the loan as collateral.

This will preserve the value for mortgage purposes because the bank will grant loans based on the value of the contract, even if the contract is way below appraisal.

But the bank told me that if we had a separate contract to pay for a portion of the roof repair that would be fine.

If you answer zero, then put your money in the bank and get .1 or 1%. 

But if you get a judgment, you may be lucky enough to find an opportunity for your judgment lien to attach.

Is it difficult/impossible if you use only one bank account?

From fully automated Kiosks (an ATM looking thing that rents the unit, sets up auto billing on tenants bank or credit card, dispenses a lock if the new tenant wants to buy one etc), to smart phone Apps that do the same thing (except vend a lock) to 24 hour USA based call centers that will manage the business and rent the units for those customers who want a human to talk to (and the Kiosk software, smarphone App software, and call center sofware can all be seemlessly integrated within your business management software.

If, on the other hand, you are planning to use a bank and the property needs a lot of work, you may have a harder time.

I just spoke with a bank about some financing I'm looking for. 

This may very well be the first story of many of why they can't pay their rent on time - bank issue, health issue, pet issue, etc, etc, etc.