Presumably the buyer is less sophisticated than an investor that goes through the entire process on their own, but nonetheless, the old adage "caveat emptor" applies.

Motels are businesses that require employees, and all the ramifications that are related including tax implications, payroll, etc.

Underwriting is not taught in law school I don't believe.If some investor gets a landlord to sell 5 houses and gets that landlord to agree to subsitutions of collateral and that landlord is not that sophisticated as many old landlords aren't, when a deal goes sour that investor may well be flapping in the wind getting some 78 year old landlord in a position of being under collateralized, and this example is one I have seen, one I had to fix and one that got a Realtor tossed out of town basically, he left and was lucky not to be sued.

As far as assigning an explanation for the lenders behavior I seriously doubt It has anything to do with your employment, they are just not that sophisticated.

Again I express concern there's hardly any work done but he again tells me he needs it to cover payroll and get a crew there.

I generally bucket all my expenses into the following: Payroll (Note: payroll made more sense on the institutional deals I used to work on.  

Yes, a PML is a lender and like all lenders must comply with all lending laws.PML’s often will not require a lenders title policy saving borrower closing costs.PML’s often don’t charge fees, no reason to really, they perform little or no due diligence.PML’s are often not sophisticated thus can be cajoled into almost any kind of a wild loan structure the borrower desires, sometimes borrower can get away with only a note and no deed of trust or mortgage.PML’s will loan at LTV’s no HML would dare go, sometimes as high as 100%, this allows borrower to walk away from the deal with no money out of pocket if profits don’t meet expectations.  

These owners are sophisticated and won't give a newbie the time of day unless you have a very experienced brokerage backing you.I am going on 13 years now and have my own commercial brokerage focusing on retail.

@Michael Ross check out RWN for syndications, normal minimum is 50k, although many syndications require "accredited" status, there are a few which you can jump into with "sophisticated" status but they are not as common.

I have a guy that has been subcontractor basically full time with us but wants to be on payroll.