Seller carry for equity

[Justin Pumpr]

Hey all,

I’m trying to find a way to make seller financing more palatable for owners, as every deal I propose it on gets shot down. Granted the terms I offer a lot of the time aren’t amazing (they have very low interest rates), but that’s the only way I can make deals work. The seller financing portion could be for the full amount, or for a portion of the down payment.

I am wondering if anybody has kept the seller in the deal as a JV/Limited partner to help offset their concerns?

e.g purchase price is $2m with a down payment of $500k. Call it $600k with closing costs and reserves, so a $600k raise. If the seller were to carry the $500k down, could I give them the majority of the LP pool on top of whatever terms I negotiated with them? I.e they get 0% interest on the 500k, but they get some of the cash flow and some of the profits when we sell?