Unless, like he mentioned, the house is in poor condition and won't qualify for a bank loan that a typical buyer would need. 

NOI, and thus cap rate, feeds into how much of a down payment is required b/c it feeds into the "sizing" of the loan.Many asset classes, like apartments and offices, have less than ideal in place cap rates today, so you need 35% or 50% down to buy them (unlike a DTI-based home loan, your personal W2 income cannot be used to significantly offset).

You'll want to be able to obtain balances, confirm payments were received, obtain payoff statements, etc.Ask your friend to share the username and password for the servicer's websiteI recommend using a loan servicer to collect your payments and disperse payments each month to the underlying mortgage servicer.

What’s a Wrap-Around Mortgage Loan?

How much gross leasable area, how many offices, current vacancy rate, age of building, any proximity to hospital or surgical center, what type of loan product for first lien, variable rate/fixed rate, the terms etc ie SOFR + what spread etc, current NOI, cost per square foot, replacement cost per sq ft, and any and all details you can share, I assume HENRY Capital compensation will be similar to your Fund 1, with 8% preferred and 80/20 split? 

Otherwise you are just getting a juiced return and sitting on too much loan leverage.

FHA loan?

Easiest solution might be just to extend the period of being able to collect that overage before it gets escheated to the state or taxing authority. 

Factor in some tax benefits and loan paydown, I think it is starting to look easier to decide. 

if you want to chat about investments/loans, I can make some time.