Loaning on a Commercial Building

[Dan P.]

I have a situation where I will be providing the funds for an organization to purchase a commercial building in Loveland, CO. I will loan them the money for 3 years and then they will refinance. I have done deals structured similarly for residential properties (filed a Deed of Trust at closing to secure). Are there differences when dealing with a commercial property? Do we still file a Deed of Trust or is there a different instrument that is used? What other things do we need to watch out for on this?

Also, the borrower will be renovating the building - I need assurance that they have access to enough money to complete the renovations to make the property usable for their purpose (of course they are mutually interested in this being the case). How do we allow for enough due diligence to limit the potential of a giant "whoopsie-daisy" when it comes to renovation costs (or project delays due to zoning, permitting, etc) without making the seller reject our offer? Are there some customs here? We know the building needs work, but want to make sure we are confident of coming in close to the renovation budget and not twice the cost. The borrower is using an agent so we will have experienced representation, but looking for advice from others who have been successful here. 

Thanks!! Dan