I have a junction object(JuncObj) with a custom object(ParentObj1) and contact as the masters. I've created a separate obj(NewChildObj) that is supposed to be a child object of JuncObj. When I create a master detail relationship on NewChildObj, JuncObj doesn't appear on the list of object. What could be the problem? When I try this as a lookup, JuncObj is available. I really need NewChildObj as a child object with a master detail relationship so that I can make use of rollup summaries but I can't seem to figure why this is not allowed. I've read you cannot have more than 2 master detail relationships on an object, but does this mean a junction object cannot have a child object via a master detail relationship?
As per the help article:
Custom junction objects can't have detail objects. That is, a custom junction object can't become the master object in a multilevel master-detail relationship.
I strongly suggest you to go through the full article and understand all other considerations.
For your case, you can create junction object using lookup relationship instead of M-D, and then create M-D between NewChildObj and JunctionObj. Does that work?
Create a lookup from the child object to the parent object.
Populate ALL the records with a valid lookup value to the parent.
Change the Lookup relationship to a Master - Detail relationship. This is only allowed if ALL RECORDS HAVE A VALID LOOKUP. Otherwise you'll get the error you describe.
Also please check below link: