Help us get creative

[Mike B.]

My sister and I, @Liz Benzschawel, had a conversation this morning with the seller of a mixed use building here in town.  The building has been for sale awhile at a higher price, and now the seller has reduced his price significantly b/c he wants to be done with it.  At the current asking price it's a good deal, with some definite upside potential.  We're interested in pursuing this property, but here's the catch:  Due to the request of the original buyer some months back, the owner terminated the leases of the commercial tenants in the building (then the deal fell thru) and now the only revenue is coming from the residential tenants.  Since the commercial tenants compromised about 2/3 of the revenue for the building, there's no way I can see that we can get traditional financing since the property is underwater w/the commercial spaces sitting empty.  The seller has expressed interest in being open to some creative financing strategies, and we need to get back to him with some ideas within a few days.  If you didn't have the cash to buy outright, how would you approach this situation?

[Mike B.]

Thanks for the reply Scott.  I was originally thinking of a short term option or lease option, figuring the issue with seller financing is that, without commercial tenants, we'd still be losing considerable $/mo with a mortgage payment whether that be to a bank or direct to the seller.  Hadn't thought of suggesting an interest only loan.  That's a great idea, thank you