How does it work when the seller financines a portion?

[Joe Edwards-Hoff]

If I were to set up a deal where the seller was going to write a note for 60% of the property and I would need to get financing on the other 40%, how would that go? Does the bank ask me to put a percentage down on the 40% or the total sale price? How does the note held by the seller affect my DTI ratio?

I honestly just stumbled upon a possible deal and I really don't feel like I am ready to put it together. It is just words being tossed around, but my childhood neighbor just put a for sale by owner sign up, and he would most likely do some flexible negotiating with me. I assume the house is paid off or really close to paid off. AND T-mobile has a cell tower nearby which they stationed their equipment in his shop, which he told me is a $600 income. A house like his would rent for $1400. (Seattle Area) I plan to go talk to him later to discuss what his goals are. He's single and about 50 years old. I think he might hold a note to create some income. His marble/granite business has been doing poorly (which I used to work at).

Anyway, I got excited ans started talking about the deal, but the above questions are what is on my mind. If he needed a lump sum of cash (which I don't have much of) I'd have to finance that portion. We'll figure something out...