80/20 Purchases with Owner Financing questions

[James Klafehn]

Hello Everyone,

I have found an AMAZING estate that I would like to purchase for myself and my family. My previous 3 houses have all been multi family. This will be my first primary residence.
The property consists of a main 5 bed/3 bath house, a guest 2 bed/2 bath house, and a 4 car garage/workshop all on 190 acres! Normally something this large is out of my league but I am trying to make it work because it is a very rare property in my area. It also happens to be EXACTLY what I have been looking for for quite some time.

My problem is that I have leveraged each of my properties as I went along (pulled equity out of one to buy the next) so I don't have much available equity for a down payment. The investments I have made are earning me great cash flow but I simply do not have a large amount of capitol sitting in my bank account.

I already asked for owner financing but the retired couple owes money on the house so they cannot hold the mortgage for me. They need cash to pay it off. I am hoping to work out an 80/20 loan and maybe get out of the deal with little money down.

Here are the details:
Assessed value: $670,000
Asking price: $655,000 (just lowered from $730k, owners are "highly" motivated to sell)
They seemed to like my purchase offer of $590,000 when I proposed an owner financed deal. My agent says he thinks I may be able to get it for even cheaper. I offered $120k down for an owner financed loan for 15 years at 4.5%. It was denied only because they need cash to pay off "bills". I only have $120k to put down if a business loan I applied for goes through. So $120k may or may not even be possible, I definitely couldn't put MORE down.

Now, I am now hoping I can arrange a deal in which I obtain a 30 year/$416k mortgage through a local bank, (I was told the cutoff for a jumbo loan was $417k) and have the current owners finance the remaining $174k for 10-15 years.

My questions:
How do 80/20 loans work?

Can I tell a bank that I am getting this property (which is assessed at $670k) for $416k then get an unsecured loan from the seller for $174k and hopefully dodge any down payment?

Do you think a bank would still require a down payment if I was purchasing a property for $416k when its assessed at $670k?

Any other pointers would be greatly appreciated!

With my cash flow I will have no problem making the payments. I just need to convince the banks and seller to give me the property, which of course is the hardest part!