Seller Financing to Traditional Financing Question

[Nicholas Wever]

Hi All,

I have a simple, but silly question... I closed on 2 properties this past years. Let's say $350K, 50K down, seller financing at 6% IR with a 5 year balloon.

Let's say I start to shop around and to transition from seller financing to traditional financing because I found a 5% IR, I am essentially refinancing and putting the loan on the books. Assuming that a loan required 10% down, how do people come up with the 10% when going from seller financing to traditional financing? 

I already have $50K tied up in the downpayment of the seller financing, so I cannot ask the seller to give me back that $50K so I can put a downpayment on a new loan to pay him off. What does this typically look like?

These are commercial properties FWIW. thank you!