Buyer wants to self finance, what if he defaults? In Texas
So he's putting 35% down, but if his business fails and he has no assets I would assume I would write into the contract that we own the building until its paid off. Is that pretty standard? Also, I assume there would be an interest rate, it probably shouldn't be as high as a bank loan though, right?

Thanks for the help.
[{"id": "gmvpkk1", "text": "You mean he wants you to finance the building to him?\n\nLook up \"land contract\", \"real estate contract\", and/or \"purchase money mortgage\" where you own the real estate until the buyer makes the last payment.\n\nInterest rate should be comparable to or slightly higher than a bank loan since a buyer would typically ask for this arrangement when a bank won't provide the loan. You may want low or no interest (and higher total price) depending on your desired tax treatment.\n\nLook up IRS Publication 537 Installment Sales for tax treatment. Remember it is not a \"loan\", the buyer is making payments to you until the purchase is complete rather than giving you all the cash up front like a buyer with all cash or outside financing.", "replies": [{"id": "gmvqlte", "text": "Thanks so much, I'm a bit out of my depth (obviously), I work in IT. Boss is on bedrest (realtor just to get discounts) and I'm left holding so many new responsibilities. I'm glad at lease one of my thoughts was correct.\n\nI really appreciate your response, thank you.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gmw4vy7", "text": "Our firm did this with a building, guy paid half off, went broke and we still kept the building.", "replies": [{"id": "gmwfysk", "text": "Sounds nice", "replies": [{"id": "gmzy6a4", "text": "Unfortunately I think the guy ended up killing himself.", "replies": [{"id": "gmzyjm1", "text": "ahh, I future awaits", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gmw5yn7", "text": "Traditional mortgages have a claim on the real estate as collateral for the loan. Build in a deed in lieu of foreclosure if your local laws apply. If they don\u2019t, perhaps structure the note as two separate notes. A senior mortgage with the fee simple interest as collateral + a mezzanine loan with the equity interest pledged as collateral. \n\nDecent amount of legal work to be done here but thankfully these are all boiler plate.\n\n\nAnd yes, interest rate - there\u2019s a time value for your money. It should be higher than a banks interest rate bc of numerous reasons but from your perspective, the second the can qualify for a loan from a bank on the property they should be economically incentivized to refinance and pay you off.", "replies": [], "depth": 1}, {"id": "gmwk8nf", "text": "You need a real estate lawyer. It sounds like you are describing an executory contract which can get you in major trouble in Texas. If you are hung up on basic issues like this, you can get yourself in some very serious trouble when it come to the more complicated terms. You can spend a little now and get on the right track or spend a whole lot more later when you screw it up trying to do it yourself.\n\nEdit: I'm a Texas real estate lawyer, broker, and escrow officer. In the biz for 25+ years", "replies": [], "depth": 1}, {"id": "gn4uquj", "text": "In Texas typically you would deed him the property while retaining a vendors lien on the property. At the same time both parties execute a deed of trust which provides for a right of foreclosure in the event of default. This is standard regardless of bank or owner financed.\n\nSo buyer will own the property, subject to your mortgage, be responsible for insurance and taxes until he defaults. If he defaults you take it back.", "replies": [], "depth": 1}, {"id": "gnoiwt1", "text": "Remember that if you finance the buyer, you are the bank/lender. So it is always good to put some safeguards in. Specifically insurance where you are the loss payee and a requirement for real estate taxes to be paid.  \n\nYou should not do this without the benefit of an attorney.", "replies": [], "depth": 1}]