Give Seller some equity now rest after flipping

[AC Cooley]

Hi,

I have a private lender that is willing to loan up to $150K for purchase and rehab. I found a deal for a single-family in a Chicago upper middle class neighborhood where the purchase would be $140K and rehab would be $80K and conservative ARV is $350K. High end comps are $400K. The rehab is that high because for the neighborhood the rehab would have to be relatively high-end.

The mortgage balance is $90K. I am trying to think how I can structure the deal where I can give the seller $10-$20K of his equity now and the rest after I flip the property. I know no money down is best but for a deal like this I see no reason not to put some money down especially if I have a private lender.

Should I take over the $90K mortgage subject-to with $10K down with a $40K promissory note due in 12-18months?

Thanks in advance for your replies