commercial downpayment equity question

[Chris Smith]

My partner and I are looking at 6-unit apt. My cousin (wholesaler) is willing to hold the note 70% we pay him 30% and 10% interest monthly on the 70%. We plan to right away apply for commercial lending which will require 25% down. The challenge is paying 30% and then turning around and paying another down payment of 25% within 60 days. Possible to use the equity in the property if it were to appraise for higher than what we purchase it for as a downpayment. 

Technically the commercial application is a refi since we already own the property. I've been told we can't use the equity as towards a downpayment on a new loan but since we own it curious if that is different? I'm open to other creative deal structures or options. Thank you in advance for the words of wisdom.

[Jessica Zolotorofe]

I don't see why not. You don't pay a "down payment" with a loan, it's just an LTV requirement. If you pay off the existing lien with the new mortgage then you just need 25% in equity in the property, not 25% cash. So in other words, they'll only lend 75% of the property value after the current loan is paid off.