Recourse Loans

[Jason Merchey]

I am getting some pushback on the idea of recourse vs. non recourse loans from a banker I'm just about to go with. My accountant told me not to take out a recourse loan, one that allows for deficiency judgments (this would bemy first loan). I live in South Carolina, where they are not in fact illegal. So I guess I just need some background info or some context, as I'm so ignorant about loans.

In this state, what are my chances of finding a lender who will do non-recourse? Can I get a loan out of California? Can I find a lender who will do an investment loan for a slightly higher percentage even in this State? And yes, I am putting down a huge amount of money (for reasons of cash flow), so the L to V ratio shouldn't be the issue. And yes, my area is doing well as far as the housing market is concerned - we should appreciate.
Should I be telling him I will have to look elsewhere, or is this just totally standard - something akin to putting down a security deposit on a lease - you pretty much have to so I'd better get used to it?

[Account Closed]

Your accountant is trying to protect you, but the reality is 99% of loans from banks (and 100% that I've gotten) are recourse, meaning you sign a personal guaranty. You may be able to get private lenders to do non recourse. There are other avenues for non recourse if that's your goal--seller financing, sub2, etc.