Non recourse Loan details
I am looking at a turnkey deal that has a refinance with a non-recourse loan. The loan details are: 40% LTV, 1-5 years 5%, 6 year - 6%, 7th year 7%, and 8th year is a balloon payment and remaining interest. This is an interest only loan. The thought is that the property would be refinanced in the 5th year or sold. This scares me a little with the balloon payment if we cannot refinance (i.e. the market crashes) or sell the property, however, I wonder what others think?