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Present Condition You are looking to acquire a 20-unit apartment building that presently is in bad shape. 

This property needs to be totally upgraded to bring in the rents that will give this property a positive cash flow. 

You know that this upgrade will take a couple of years to complete and during this period of time the units will be producing a negative cash flow. 

You write an offer asking the seller to hold a note on the apartment building with a very low interest rate. 

The seller has already lowered the price on the property and is not willing to also give you a low interest rate on the note.

Possible Resolution –You have another piece of property with substantial equity.

You offer to give the seller additional equity in return for the low interest rate.   

Benefit to You – You receive the lower interest rate giving you the cash you will need to upgrade the property and now your negative cash flow will be substantially reduced.

Benefit to Seller - The seller has additional equity giving him greater security in the note. 

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