Non Recourse Loan Opinion?
I've been in discussion with several lenders recently as I build my multi-year business plan. Lima One offers a program that has non-recourse loans that can be used within an LLC. Of course, there is a cost to this and the rates are currently between 6.75% - 8.25% for a 30 year fixed.
Now, before you blast me with that’s a crazy interest rate range, please consider the following:
1. rates are probably going to be higher in the next few years.
2. Locking in a 30 year amortization, commercial non-recourse loan now at 6.75% (assuming you have 740 credit score) might be a smart business strategy for the risk averse.
3. non-recourse loans mean no personal guarantee by borrower. Very difficult to find this type of loan on RE
The big thing for me is you don’t have to personally guarantee the loan. If you use a lot of leverage to build a portfolio the non-recourse loan seems something to consider as a risk mitigation strategy even at the higher rates.
Thoughts?