Exit Strategy on Installment Sales Agreement

[Ken Hanna]

Hello Everyone,

I am currently looking at a deal now to purchase a 6 unit building using an installment sales agreement as the property does have a current mortgage.

My question is what sort of language and/or requirements in the contract will be crucial in building the equity in the banks eyes for a refinance commercial loan before the 5 year balloon is due? I am under the impression this has to be written correctly in order to safely build the equity by assigning all or most of my monthly payments towards principle (bank requires 20% in the deal).

Any insight would be appreciated! Also feel free to voice any other concerns regarding this type of transaction as I have not done this yet.