How to write up Seller Carry Second

[Robert Shoffner]

So if one goes under contract to buy a retail center (for example) and the seller agrees to carry back a 20% second position note. The bank would do 75% on the first position, so investor/buyer would bring about 5% to closing table.  How does one write up the contract to avoid having the bank be upset and make a big deal about it?  Some banks may refuse to do the loan.  Do you set up a contract to purchase the property and then another contract to obtain a loan from the seller?  Then essentially do a double close?   I'm not sure how one would do it correctly.  Any thoughts on this?

[Bob Langworthy]

I was under contract on a deal last fall for $575,000 with a seller carry of $100k and 10% down from me. I talked to the bank in advance to be certain that they were good with it. The second was an addendum to the P&S.

Hope this helps,