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Updated about 13 years ago on . Most recent reply

User Stats

188
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118
Votes
Chris Weiler
  • Flipper/Rehabber
  • Anaheim, CA
118
Votes |
188
Posts

To recourse or non-recourse

Chris Weiler
  • Flipper/Rehabber
  • Anaheim, CA
Posted

On a large loan, all things being equal, would you rather have a 6% loan with a personal guarantee or a 12% non-recourse loan? Assume a 10 year loan where you have cash flow rentals that can easily cover debt financing.

Most Popular Reply

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782
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415
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Darryl Dahlen
  • Commercial Loan Officer
  • Southern Maine, ME
415
Votes |
782
Posts
Darryl Dahlen
  • Commercial Loan Officer
  • Southern Maine, ME
Replied

If the properties can debt service a million dollar loan at 12% then the savings at 6% should allow you to build up sufficient reserves where you can weather any bumps in the road thus mitigating the risks that come with a recourse loan.

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