Self-financing commercial land. What are hidden risks and possible ways to protect myself?
I own some land that is zoned for Industrial.  It is in an area that is economically depressed, and a sale on a small portion of it fell through because the people wanting to build a car wash couldn't get a loan for $200k.  

I didn't personally know the buyers or their financial/credit situation, but since it is a poor area, I think the banks are shy of taking risks.

I'm in a situation where I owe no mortgage and the taxes and fees are unlikely to exceed $40k annually.  I can afford to pay these fees for the next 2 years without a problem, so I'm not desperate to sell it at rock bottom price.

I wanted to explore the option of financing buyers myself.  I don't know what the commercial loan rates are in one of the poorest areas of one of the poorest states.  

I'm willing to stretch the loan out as long as 20 years, which would also help me with the taxes instead of adding a big lump sum to to our household income. 

I would need the buyers to have some insurance to offset the cost of clearing any half-built structures, if they default.  But otherwise, if they do default on the loan, I still own the land instead of the bank, and can find another buyer.

I'm happy for advice.  Should I only try to finance part of it at first or is it better to try to sell the whole thing if a buyer is wanting it all?  Where can I get a good idea of the current, local loan rates?

How do I advertise?
[{"id": "d82wi2j", "text": "Off the top of my head:\n\nI would guess that a minimum market rate for this type of investment is 8%-12%, and you may charge an even higher rate.\n\nI would also closely evaluate who your buyer/borrower is, how motivated  they are, what are they building, what is their business plan, and do you think it will work? \n\nI'm not sure what sort of litigation risks there are, but it won't be a clean process taking the property back if they default on your loan.  So, I'd really focus on who you are lending to and what type of cash flow they can realistically produce. Beware of rosy projections - they nearly never turn out that way.  \n\nAlso, what are they building on the property, and would there be any upside/downside to it reverting back to you?   For example, downside may be you being stuck with demolition costs. Upside is you may end up with a new warehouse that could be put to use.  \n\nOther tid-bits:  if your original buyers couldn't get a loan, what makes you think a new buyer could? What is the difference in their business plans?\n\nBest of luck, and let us know how it goes.  Interesting scenario.", "replies": [{"id": "d82z7l7", "text": "Since I had no idea why they couldn't get a loan, it occurred to me that the reasons might be something I can work around.  They might have never owned a business before, or they've been single income for years but now the kids are all in school, so they wanted to open a car wash.  Since I might be able to extend the loan out longer than a bank, the payments could be lower and more manageable.  It would have to be profitable for me, of course, but there might be potential to find a mutually beneficial solution.", "replies": [], "depth": 2}], "depth": 1}, {"id": "d82xotj", "text": "Seller financing can be a good option, but the buyer should still put a lump sum down for a reasonable percentage of the land value and you should get a higher interest rate than a bank would charge since you are potentially taking on more risk by agreeing to a loan that a bank would not.", "replies": [{"id": "d82z98b", "text": "yes, it is definitely not without its risks, but the right situation could prove profitable for me, and create an opportunity for someone else.", "replies": [], "depth": 2}], "depth": 1}, {"id": "d84hhdd", "text": "1- check your local laws on foreclosure and figure out how much time it takes to foreclose in the event something goes wrong. this varies from state to state, with some states taking only 45-60 days to others taking potentially years.\n\n2- maintain some control of the site through the loan documents until the note is paid off. don't let the borrower change the zoning of the property unless you sign off. don't let the borrower build unless you sign off on plans. you don't want the borrower doing anything that could impair the value of the property (and your collateral) unless you approve of it.\n\n3- don't settle for a 2nd lien. the borrower may have to get financing from somewhere else to build the improvements. I think thats probably a good sign that you should pass. you don't want any lender getting in the way of you taking back the property in foreclosure in the event things go sideways.\n\n4- hire a local atty. the local state bar association should have form loan documents that can be used for this transaction, and the local commercial realtor association may have a form PSA and addendum for seller financing. hopefully it wont be that expensive, but we attys value our time!", "replies": [], "depth": 1}]