Any help would be great, I'm in a unique situation and have no idea what to do. I currently own a restaurant and live in the apartment above the business, they are the only two units in the building. The owner of the building informed me that he is selling and is giving me first crack at it. He's asking $325,000, but I don't have a large downpayment (nothing in excess of $10k). The business has been a successful cashflow for just over 5 years in this location.
Is it possible to get a loan with no down payment or a first and second mortgage to minimize the down?

Ok some comments;

1- Find out how much the seller is willing to finance in the form of a note. This will make it easier to finance as it will essentially be a second subordinated to any lender that you can get.

2- Find out how much the space goes for as far as rents in your market. This will give you an idea of how much the building is worth by doing a quick income approach.

3- When do your lease expires. If you have at least a couple of years and you are paying less than market, you might as well just stay a tenant.

4- Consider bringing in a partner for the real estate portion.

The owner won't finance, as he is moving out of the state and is liquidating all of his assets. Is there anyway that this can be considered for a residential loan since it is my primary residence and the residence occupies more space than the retail portion? Current market rent on the entire building is $1900

From what I have heard and read about, this would not qualify as residential due to its commercial component. But please remember that I am not a residential lender

The owner moving out of State does not mean that he can not take a note. I used to send my mortgage payment across the US to California. There is such a thing as the mail. In other words, I would try to negotiate this.

$1,900 a month {assuming we are talking triple net lease} and that there are no other expenses associated with the property comes out to a 7% cap rate. I am pretty sure that the cap rate is much lower once expenses are accounted for. In other words, I would try to negotiate this.

Assuming that your figure of $1,900 as fair market rent is correct, he is asking way too much for the building. Your mortgage payment alone, at 80% of the value of the building 6.75% 20 year amortization would make your mortgage payment alone $1,976, well above the rents. That mortgage figure does not include real estate taxes, insurance, repairs and maintenance etc.

The rent he is charging you is not necessarily full fair market rent. How is the lease structured? Do you also currently pay the water & sewage, maintenance & property taxes? Are either of the leases triple net?

Has the seller provided you with three years historical expenses on the building along with an interim financial? You will need to determine what the actual ownership expenses have been in order to come up with a true fair market value for the property. With a fair market lease of $1,900 per month, the ownership expenses on the building including your new mortgage payment should not exceed $19,000 per year.

Typically you will see no higher that 90% on a first mortgage with you as the buyer needing to come up with 10% from your own funds plus related closing costs.

The building has needed serious repairs, as it has needed a portion of the roof replaced twice due to leaks, windows that have been broken due to high wind, electrical issues, etc. I knew it was overpriced but I'm not sure how to calculate what it worth due to the repairs. My greatest concern is that a buyer will pick up the property and evict my business, thus I want to seal my own fate in the place. I truly don't beleive they will get anything more in rent due to the nature of the residence being located above the restaurant (it is very noisy and shakes the home starting at 6 a.m.)

The property would def be a mixed use property. The property does sound like its overpriced and the true value would only be determined by a comm appraisal. You should go to a website like (www.mortgage-calc.com) which has mortgage calculators and see what you can really afford. There are ways to work around low downpayments but you need atleast 10% down + closing costs which according to your post you dont have. This will not work unless you have a min of 10% down and or you can borrow money from friends and family. Dont let anyone tell you otherwise. With the building already overpriced and in need of repair, i dont think its worth it in the short or long run.