Regional lenders, however, were not happy with the strategy and would not give me credit for the value I created because they wanted me to have skin in the game.

Down payment is just meant to lower the loan-to-value ratio so you have skin in the game and it increases the spread for the lender.

They have the thick skin and wherewithal to put up with this.

Besides,there is cost of money ( specifically hard money ) and you will have skin in the game no matter. 

A: If you need to borrow the down payment and the seller carries back the balance, you have no skin in the game.

Unless, you are a seasoned landlord who can handle this neighborhood (which I'm guessing is pretty rough just based on the numbers), you will get creamed on these deals with repairs, vacancies, etc.  

It is just about what flavor of ice cream you love and the occasional bad taste you can stomach from it, keep going, and be happy still.    

In addition, there are features I would change if I lived upstairs that would be untouched if I rented: mini blinds, cream/yellow paint color.

I’m looking to start BRRRRing once I develop my portfolio and get some skin in the game.

So you're trying owner finance 25% and 75% conventional commercial loan, have you checked if a lender would lend to you if you had 0% skin in the property?