I currently have a 12-unit multi-family property under contract and, per the terms of the P&S, the seller is to provide me 20% seller financing. The P&S states the rate and loan term, but otherwise explains that the details of the second mortgage are to be drafted and signed by the end of the due diligence period.

The P&S lists my name followed by "or assignee(s)" as the buyer and I am planning to assign the property to an LLC before closing. It's also possible that I will bring in a capital partner between now and closing and, going forward, I can't say if and when that capital partner might exit the deal. Therefore, my preference is to use the LLC for all mortgage contracts, including for the seller financing, so that partners can come and go in the future and names never need to be added or removed from loans.

When I recently had the second mortgage contract drafted and sent to the seller, he reacted negatively to seeing the contract between himself and the new LLC instead of between himself and me personally. I can understand why he wants me personally on the hook for the loan, but I don't want to bring in partners and not have their name on a loan for a property we own jointly. Similarly, I don't want to have a loan for a property that I technically don't own (since my LLC would own it). I could go ahead and tell the seller about the new partnership and draft the mortgage contract with our personal names on it, but as an older gentleman and a somewhat unsophisticated RE investor (this is the only rental property he has ever owned), the seller might become upset/alarmed by the entrance of a new person into the picture so late in the process. The property is under contract either way, but I don't want the seller to refuse the seller financing he agreed to and cause me trouble. In addition, the partner might want to leave the deal in the future before the second mortgage's term ends (5 years), in which case he would liquidate ownership in the property but still have his name on the loan. I would instead prefer to have my LLC on the mortgage and use LPs as I see fit while maintaining the perception from the seller's standpoint that I am the only new owner.

How would each of you handle this situation? Maybe I convince the owner to sign the mortgage contract with the LLC on the condition that I individually provide a personal guarantee? In that scenario, I would still be fully liable for a loan on a property that I might only partially own in the future.

Thank you in advance for your help and guidance.