Non-recourse portfolio loan?

Question

Andrew Postell · Answer

@Phil Morgan Ahh, ok.  Now I am understanding what you are looking for.  This is sometimes referred to as a "blanket" loan but this would certainly be a "commercial" type of product.  Keep this post active here but I might suggest trying in the commercial forum as well.  You might get some more specific product answers in that forum since it is designed for that type of a loan.  Just a thought.

Andrew Postell · Answer

@Phil Morgan A nonrecourse debt is a type of loan secured by collateral, which is usually property. If the borrower defaults, the issuer can seize the collateral but cannot seek out the borrower for any further compensation, even if the collateral does not cover the full value of the defaulted amount.

For residential real estate you should only be seeking nonrecourse loans.  I can't speak for every bank but all of the portfolio loans that I have experience with have been nonrecourse.

Are we talking about 1-4 unit properties?  Are you looking for a specific type of portfolio loan or something like that?

Maybe providing a little more information might help me guide you in the right direction.  Tag me with any other questions.  Thanks!

Jeremy Lee · Answer

Portfolio/blanket commercial loans exist for both non-recourse and recourse options.  Typically, this looks like a 5 or 10 year loan (30 year amortization) and is comprised of at least 5 assets (SFRs, Multifamily, Condos, Townhomes).  Feel free to message me and I'd be happy to chat with anyone looking for more information on financing options.

Daniel Dietz · Answer

@Phil Morgan we have only done non-recourse with our SOLO401K loans (that is the ONLY way they can be), and there is a list somewhere here on BP of lenders that do them. I am not sure if they also do them for 'non retirement accounts' or not. The one we used was NASB... just google them.

The rate WERE quite a bit higher though. We were doing a regular protfolio loan at the same time for about 5.125% with 25 year amortization and the non-recourse was 6%, 1 point and 20 year amortization.

Dan Dietz

Avram Shabanyan · Answer

@Phil Morgan Thank you for your post on forums!

Is the money coming from your personal assets or retirement account (solo 401k or IRA)? There is option for non-recourse loan to buy fix and flips, fix and holds, and long-term rentals. There is couple of other lenders that specialize in non-recourse lending and usually the terms are similar. Normally, a non-recourse loan are max 60-65% loan to value, rate estimated to be  between 5.25-6.5%, minimum loans are $50,000 and require a positive cash flow for rental income. Many lenders look at property cash flow, condition, location, purchase price, and etc.

Dan Kryzanowski · Answer

First question - where is this $10k coming from? Specifically your personal checking/savings OR a retirement account (e.g. Solo 401(k), SDIRA)?

Grant Rothenburger · Answer

@Phil Morgan I have a friend who works with a great lender. @Brandon Moryl Can you guys help here?

Phil Morgan · Answer

@Andrew Postell Thank you for the reply. I have a bunch of 1-4 unit properties and a couple 8 unit buildings that I am looking to put together into one portfolio loan. Up to this point I have financed all of them with 53rd with conventional loans using myself and my partner as guarantors on all of them.  We are looking to put them together and obtain a non-recourse portfolio loan and have the properties stand on their own and not on our back.  This is the situation we are looking at right now.  Does this make sense to you?

Thanks

Non-recourse portfolio loan?

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