I own a duplex and a business I am a part of wants to purchase more property. In order for the business I am involved in to get the loan needed I was given the option to put up my duplex as collateral. The duplex is currently rented out for $1500 a month. If I was to put the duplex up as collateral on the much larger loan then of course I will be experiencing a opportunity cost as the duplex cannot be sold during the time it has been collateralized. However, I will continue to rent out the duplex and collect the rent (just as I was already doing). I actually had no prior plans on selling the duplex. Is there a formula I can use to determine how much the company which is using my duplex as collateral to get a loan should possibly pay me or owe me to use this as their collateral?
note: The duplex is worth about $80,000, rents at $1500. Even though I wasn't planning on selling the unit in the meantime, you never know what may have came up, etc. I am still in school so I may be missing a very basic concept, please let me know if there is a name/term of what I am trying to do. Any ideas on ways I can approach this are greatly appreciated.