Updated over 14 years ago on . Most recent reply
To recourse or non-recourse
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.
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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.