All that to say, PMLs are usually more concerned with the value of the property and will lend at a lower LTV regardless of ATR (ability to repay) because they know they can take the house for 65 or 70% of the value if you default in a worst case scenario.Hope this helps!

Thank youCREATING a note from the sale of rental property can be beneficial IF either of these two possibilities exist(1) you are able to obtain a significantly higher price on sale of the property by offering a seller financed note WITHOUT an undo increase in default risk(2) you are able to “wrap” an existing mortgage note bearing a low rate of interest with a seller financed note bearing a higher rate of interest. 

Your biggest risks are tenant defaults and rent collection issues.

We track our post-closing default rates and in past 4 years we had like 1 file and I think they ended up catching up on payments. 

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

With regards to recourse vs. non-recourse loans, would putting the HELOC in 1st position allow a bank to come after personal assets in the event of a default?

The buyer defaulted on the loan, and we need to start the foreclosure process.

When they default, the lender forecloses.As for the comment about the minimum bid only paying off up to the judgment years:  That is one of the things we have to research.  

Often with a solo(k) the structure will be something like this, the financial institution will provide you with a 401(k) plan document and adoption agreement, you should be able to select certain plan defaults.

Maybe you can call it a high C rating, but the tenant defaults are just not there to call it class C.