First owner finance deal question

[Ken Nyczaj]

Hey all,

Looking to purchase my first MHP and as I presented the LOI to the bank and how the deal was structured they weren't too thrilled that I was looking to have no money in the deal. Here's how it was structured on the LOI to the seller:

$1,250,000 purchase with 80% bank financed and 20% owner financed. $1,000,000 bank financed and $250,000 owner financed.

Even with the bank being in first position, they saw the seller financed portion as the seller being in 2nd position, and if we were to be foreclosed upon, then the seller must be paid back their note by the bank before the property could be taken possession of. I guess the bank is looking at it like, if they loaned $1,000,000 and then we didn't perform, they'd then have to pay the seller $250,000 and would be at a loss.

Then, I thought, well what if the 2nd mortgage wasn't secured by the property but was an unsecured promissory note between buyer and seller, where we were only personally obligated to pay the note...

Just curious what others do in this type of scenario, haven't presented anything to the bank yet.