Question about extent of protection from Non-Recourse Loans

[Steve Burt]

Does anyone have any advice on either the extent to which Non-Recourse loans are actually non-recourse or how to find a lawyer to pose these questions on this topic to? I have extensively searched the BP forums but cannot find anything to address my question.

I am thinking about purchasing a small apartment building and looking at financing options for 5+ unit.

This type of financing is often nonrecourse, and may carry a higher interest rate for this reason. If I opt for a nonrecourse loan I want to be sure that it really is nonrecourse and my downside and personal assets are protected especially if I am giving up a lower interest rate and taking on greater costs for this loan type, LLCs etc. In the past ~8 years, the definition of bad boy carveouts has become more broad when adjudicated in court.

For example: if you can't pay your bills in your single asset LLC and declare bankruptcy, then that's violating the bad boy carveout. If you only have money to pay property tax, so you cant fix HVAC, then that's a violation. Essentially clauses that used to be strictly reserved for gross negligence or cartoonish levels of fraud and malfeasance have now been greatly expanded.

Any advice on how to research this or other people's experiences would be appreciated.

Links on Nonrecourse loans and changing treatment
https://providentlawyers.com/are-nonrecourse-loans-feasible/

https://dolgettalaw.com/2012-03-non-recourse-debt.php

https://www.cohencpa.com/insights/articles/nonrecourse-loans-be-smart-about-carveouts-that