4 & 5 Unit Buildings that advertise “Seller Financing” but want 40% down

[Darnell Robinson]

New investor here. As I try to explore Seller Financing, I’ve come across 2 situations. 

2129 Clinton Ave, Alameda is a 5 unit building asking $2,350,000. Seller Financing available at 3.5% over 9 years left on current term & they want 41% down.

3868 Maybelle Ave, Oakland is a 4plex asking $1,460,000 at 5.25% over 5 years(agent says this is negotiable) and they also want 40% down to clear the first. 

I’m new on this seller finance area and called to find out what the terms were on each. The Alameda agent was very nice and professional as I explained I was new to this and had questions. He immediately sent me all the info I asked and said if the buyer that they current had in escrow didn’t get approved, he would call me asap.

The Oakland agent was rather condescending and told me that if I didn’t “have $650k to put down then I shouldn’t bank on getting any deals of this size done.” I explained to her as nicely as possible that I have had many conversations with private lenders and hard money lenders and boom 💥 she cut me off and scoffed at me that “neither of those wants to take a second position so I don’t think you know what you’re talking about!” I didn’t get upset I simply replied that I wasn’t so sure of that. To this, she got a little condescending so I I told her to have a nice evening and that I’d probably meet her at some point in the future and looked forward to learning more. (I’m also an agent in Oakland).

When a seller is asking for 40% down, is this because they want to take care of the first lien? 

Am I wrong for calling and trying to learn on the fly?