Newbie Needing Help: Partial Owner Financing

[Jon Ankenbauer]

I am an aspiring investor and have spent the past year listening to the podcasts (currently on episode 216!), reading books, analyzing deals, reading through the forums, driving neighborhoods and so on.  I have been completely plagued by analysis paralysis and am finally attempting to put an actual deal together!  I am located in Parker, CO (just South of Denver) and have focused my search to Colorado Springs as the market is somewhat more affordable than Denver, it is within driving distance and I have family in the area.  It is actually a family member's property that I am trying to put the deal together for.  My grandparents own (2) properties, their primary residence (paid off) and a rental property on the same street (has a bank loan with substantial equity).  It is their rental property that I am looking to structure the deal on.  My question is; how difficult, or how likely, is it to structure a deal using partial owner financing?  My idea was to obtain a bank loan to cover the outstanding balance on their current loan and then create an owner financed note for the remainder of the purchase price.  Will the bank have any issues with the second loan?  I would imagine the owner financed loan would take second position to the bank loan, correct?  How does it look if the owner financed loan is structured for interest only payments?  Would we just add a clause for a balloon payment after so many years?

I have recently finished reading No/Low Money Down and am trying to stay creative with my financing options but also want to make sure I fully understand the process and want to make sure that I am able to present a deal that is a win/win for both of us.

 This is my first actual attempt to make a move towards a deal and am looking for a little advice/guidance from any of you experienced investors out there!  Thank you in advance to anyone who is willing to share their wisdom!