Make sure they are aware of the difficulty you are having searching for properteis and be prepared to explain exactly what is making the search difficult so they can better understand what it is you are trying to do to help overcome that obstacle.

The other day I was watching this classic with my wife, and remarked, "Sure, Potter is kind of an ***, but is in a real tough position in light of the economy, and has to have a thick skin."

I believe it is a great way for some folks to get started, especially if you are investing from a distance.I think a partial ownership is a stronger investment because the folks running it have skin in the game also. 

Any ideas on how to structure this where my partner has some skin in the game on the upfront purchase if we choose to use my line of credit?  

You'll need to have some skin in the game (down payment) but they won't typically be as concerned with your income.

That said, nothing is impossible but I did want to point out the difficulties you would face looking for that.

My only other option is Hard Money and that requires at least 20% skin in the game...which I don't have!

The challenge is "the skin in the game" at 25% to 30% down.

Cold calls can be difficult. 

You will have difficulty getting the entire house rented prior to May (summer session), but may be able to rent a room or two (though that sometimes makes it more difficult to rent the house, unless you can move those couple of tenants to another location).