Private funding for down payment

[Sara Abernethy]

I'm putting in an offer on a commercial property.  I'm a part-time investor - I have a six figure day job and this will be my fifth property (3 long-term rentals, 1 vacation rental, and this will be a 3 unit vacation rental).  

I have a bank lined up and ready to go, who will be giving me a loan for 80%.  A friend is loaning me part of the down payment.  I would like to structure this as an unsecured personal loan, with a promissory note.  However, he wants it to be a secured loan, and be listed on the title.  I'm worried the bank will be concerned.  My loan with my friend is short-term, 3 years, and the bank loan will be 30 years.  

The way I have positioned this is that as an unsecured personal loan, if the property turns out to be a dud (it won't be, it will be awesome), then I still owe my friend the money regardless.  My day job brings in more than this new property will, so he'll get the money back regardless if the property performs.  The difference is, if I default, he has to sue me for the money rather than get the property (which in my opinion - why would he want the property if it's a dud?).  

I do understand his perspective - secured is better than unsecured, but I just don't think that secured is possible.  Any ideas here?  Any thoughts on how I could structure this to make him feel comfortable?  I'm not worried about paying the money back to him, I know I will, but I'm worried about getting him on board without killing the deal with the bank.

[Account Closed]

Secure him on one of your other properties.