Construction Loans Explained Newbie

[Ron Steele]

Hello all,

I'm a new investor. I've done single family but looking at commercial deals. I have a property for 20% down and seller finance the rest. We have a tenant downstairs and want to develop the upstairs into lofts or something. My question is how can we obtain construction financing.

Does the seller have to put their lien in second position? Is the construction loan separate? How can I put this deal together to get the financing. The upstairs are currently offices so that is an option to clean them up and rent them out, so both options are available. Thanks everyone in advance.