you need to go to a lawyer. a good one. and get the deal set up through him. there is nothing any one else here can say that will help you unless they are a real estate lawyer and doing the deal for you.
I dont know a whole lot for commercial mortgages, though i m assuming similar things will apply:
- insurance on the property.... e.g. if the place burns down... The owner should pay for that and it should be mandatory before financing it to him.
- how will it be financed? how are you calculating interest? how is he going to pay you? if he defaults on payments how will that impact you?
- if he damages the property and defaults will his insurance cover it?
- how many years will it take him to pay off the mortgage to you?
- are you going to give him the ability to pay it all out at any time?
- can he sell it before he is done paying the mortgage to you?
- have you looked over his business plan/proposition? is it a viable long term business?
- where is his down payment coming from? is it laundered money? how will it impact you for accepting it?
- if things get tough for him will you allow him to re-negotiate the terms of the mortgage with you?
- if rates in the market change will you change them on him/can he renegotiate the terms of the mortgage with you/ the interest rate?
- Are you prepared to go into a legal battle if he defaults to get your property back?
Last edited by sirex; 10-09-2012 at 09:08 PM.