Seller Financing, Taking back a 2nd Mortgage

[Keith Minton]

Hello

This is my first time posting so be gentle haha.

I am looking at buying a Duplex for 85K that will rent out for $1,500 conservatively. The seller is willing to finance 35K of it at 5% for 3 years. I can get a loan on this property for 75% of the Purchase plus repairs and it only needs 5K in repairs. So i could get a loan from a bank on this for 90K X 75% 67.5K which would mean i would only need to bring 22.5K to closing. What i would like to do is get the loan from the bank and then have the seller hold a second for 35K at 5% for 3 yrs. That way i wouldn't have to put any money down but instead i would walk away from the deal with just over 10K after closing costs.

I know this is possible but how can i guarantee that the seller will do the loan after he receives the money from the bank? I don't want to put it in the contract because then the bank won't loan me the whole amount.

I am not worried about the deal numbers, because i am projecting a min of $500 a month in positive cashflow for not putting any money down but instead getting 10K back. I have private money loans out now at 8-10% so this 5% seller loan would be a great deal. I also own 15 rental properties with over 25 total units so i am not worried about fixing it up or renting it out. 

Does anyone have any suggestions about how to structure this deal so i can get both loans. 

Thanks 

Keith Minton

Cleveland, Oh