I was just given some closing docs on a loan for a park I am buying. What would you do if you got this buried in 94 pages of paperwork?
Borrower authorizes Lender, from time to time to: (a) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times, the time for payment or other terms of the Guaranteed Obligations or ANY PART of the Guaranteed Obligations, including increases and decreases of the rate of interest on the Guaranteed Obligations.
WHAT IS THE USE OF HAVING A NOTE WITH SPECIFIC RATES AND TERMS IF THEY CAN CHANGE IT WHENEVER THEY WANT?
OR ANOTHER PARAGRAPH.
4.11LEASES: Borrower shall (a) submit the Leases to Lender for approval prior to the execution thereof, and provide such information as Lender may require to determine the creditworthiness of any proposed tenant; (b) except for security or similar deposits, borrower shall not collect any rents under any of the Leases more than one month in advance of the time when such rent becomes due.
SO THE LENDER WANTS TO NOT ONLY APROVE EVERY TENANT, BUT THEY WONT LET ME COLLECT ADVANCED RENT IF A TENANT WANTS TO PAY TOO? AND IT GETS BETTER IF I DO COLLECT MORE THEN ONE MONTHS RENT I AM IN DEFAULT AND THEY CAN CALL THE NOTE DUE AND PAYABLE IMEDIATLY WITHOUT NOTICE. OR IF A TENANT DOES ANYTHING ILLEGAL THEY CAN CALL THE NOTE DUE, THE LIST GOES ON AND ON…
If anyone wants to see the other 94 pages they are full of laughs…These are just two paragraphs out of dozens… so I ask again - what would you do? (PLEASE RESPOND) I would like some feedback from some fellow investors to show to the bank.