Tenant Wants Investor to help him buy a commercial building

[Eddie Quispe]

This is a very interesting situation I run into this afternoon. I went to see a commercial building/land for sale (zoned C1) listed on a local real estate website. I started talking to the tenant and he said he would like to buy the property but of course he doesn't have the money and is in the process of looking for financing. He has been in the building for 7 years.

I asked him a few questions and here is the deal:

He needs 60K for the down payment. If he can come up with 60K the owner will finance it for him (carry the note). I have a couple of questions:

1. If I were to lend him the money, what interest rate should I charge?

2. What terms do you usually do? 5 years?

3. What guarantees should I ask for at a minimum? Lien the property...

4. Is this a good way to invest 60K or I am better off by doing something else?

I welcome any feedback, comments, critiques etc. Thanks!!!