How to Finance a multi that is underwater

[Vincent Priore]

I recently made contact with a potential seller and am trying to structure a deal.  I need some help on finding a way to make this a win-win, here are the key points:

- 4 Family bought at the height of the market in 2006, $575K

- Current value is roughly 465K

- Seller's current loan is 6.5%, so not worth it for me to assume

- Seller is willing to hold paper at 4% with a sale price of $525K

- Current rents are 25% below market, I own a duplex around the corner so am very familiar with the area

- I haven't been inside but I'm pretty sure that the property needs updating

Can I get a bank loan at current rate for what they owe, and then have the seller hold the balance?  Will the bank accept the seller's note in 2nd Position with me having no cash in the deal?

Under these terms, the property cash flows nicely, and once I have made improvements, I can have this producing upwards of $2K per mos.

Looking for any/all ways to structure this deal.