Second Position Loan by Seller

[Brandon Allenczy]

Hey BP!

I haven't been able to find this answer anywhere. I'm trying to buy this 6 unit, and split the financing between the seller (willing to hold the note) and my bank. My plan is to finance some from the bank and get the seller to hold the rest.

My question is this: My bank said they have to be all in collectively at 75% LTV, but I can negotiate the rest with the seller (meaning he can take a second position). I'm assuming they mean if they took a second position. Does his loan amount have to be smaller in order for it to be a 'second position'?

Example: Could I borrow $100K from my bank, and have the seller's note be $350K but is still a second position? Or would someone look at that and say the bank loan is actually in a second position, and I couldn't do it because I exceed the LTV?

Thanks!