Thnaks for the info anyway Then you will need that 20% down for a seller financing to show skin in the game to any lender, as well as go through credit risk analysis.

Of course, they don't have any "skin in the game." 

They want 'skin in the game - which I get but unfortunately I don't have.  

Risk can be mitigated with collateral, so unless you've got more skin in the game in terms of finances, or real property, you should not receive more value for your money than any of your partners.

@Sharon Tippett there are many ways to skin a cat as they say.  

I am definitely not saying all, just many that I know.2. the rate if return is low for a 2nd position 3. the way this reads, it sounds like this is essentially a loan to get you the down payment money you don't have. that will be a problem for your lender (they want you to have skin in the game) and it is likely an issue for this private lender (again, in this situation you don't have skin in the game)4. you may find someone that would cross collateralize your first property (essentially take a second on it homes) so that might be something to think about.5. and last thing, I promise:) have you thought about borrowing from a family member?

Key is to buy a home in top end neighborhood not get sucked into low end inner city Ghetto type environments... this gives you the worse tenant base in the country basically and your issues will be magnified.. buy in an area were your rents are in the TOP 20% or so of the average rent and your creaming the top 20% of renter pool... if buy were the rents are in the BOTTOM 20% of price point your dealing with the least stable.. the tenant is what makes and breaks you.BAd PM of course and there are crooks in the PM business as well as some very good operators.. just need to make sure you vette them well.  

Overall I understand WF is looking to cover their skin in the game. 

wow great stuff, one of the personality issues for me is learning to have thick skin...great advice guys.

Because lenders don't finance 100% and they require you to have skin (equity) in the game.