Value Decreases Before Balloon is Due

[Chris Mercer]

Hi Folks - I'm currently in discussions with a seller who is willing to carry the note for a few years, at which point the note will balloon and the balance will be due in full.  I'm a glass-half-full kinda guy, but a realist at the same time.  I was in the game back around 2008 when the market tanked and took a couple hits.  My concerns are valid!  =)

My question is:  What is one to do in a scenario where a seller's note is due, but the market slipped a bit and the property is now no longer valued at the contract price - and the plan is to bank refi to close the note?  Other than come up with the cash to cover the gap, what options exist?

Thanks!