A family member is selling a commercial building as they head off into retirement.  It is ~3,900 sqft with a busy hair salon on the first floor and a law office on the second floor (seller is the lawyer who is retiring).   I'd like to consider buying and converting the 2nd floor to a 2 bedroom and a 1 bedroom apartment.   Seller would like to get a $1m - he's been advised he could get as high as $1.4mm.    Is there a scenario using seller financing where I could:

- Offer to buy for $1.4mm, however, ask for $400k in seller financing (interest only with a balloon at 5 years).    

- Get a mortgage for the 1mm

 - Seller gets $1mm now and then a balloon in 5 years w/ accrued interest for the remaining $400k.

 - If valued at $1.4mm - establish a Heloc to tap into the equity (80% of $1.4mm is $1,120,000 - yielding up to $120k to leverage for the renovation of the 2nd floor to apartments)

Would a lender even consider this scenario - or are their other considerations to make a deal work for this?

There is enough land on the lot to build an additional set of 4 2 bedroom apartment units eventually so I'd like to look at cashflowing the original investment and then consider refinancing into a bigger build out later to create new apartments (rolling seller financing into it...).