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For my primary residences I got non-recourse loans. When I bought investment properties when I 1031 exchanged into two new rentals, my loans were recourse loans.
Wondering if there are non recourse loans for investment properties or if this is normal. Of course it would be a huge advantage to have non-recourse loans, but recourse loans won't stop me from investing, I'll just go about it with an extra eye on risk.
For my primary residences I got non-recourse loans. When I bought investment properties when I 1031 exchanged into two new rentals, my loans were recourse loans.
Wondering if there are non recourse loans for investment properties or if this is normal. Of course it would be a huge advantage to have non-recourse loans, but recourse loans won't stop me from investing, I'll just go about it with an extra eye on risk.
Pretty sure it is going to depend on what state your properties are in and what their foreclosure laws are. Here in MN a lender has the option to go recourse (judicial) or non-recourse (non-judicial). Doesn't matter if it is a primary residence or investment property. That said, the VAST majority of all foreclosures here are non-recourse as it typically does not make fiscal sense for the lender to go after the borrowers.
In both types of loans, the lender is allowed to take possession of any assets that were used as collateral to secure the loan. In most cases, the collateral is the asset that was purchased by the loan.
While potential borrowers might find it attractive to hold out for non-recourse loans, it is important to remember that they come with higher interest rates and are reserved for individuals and businesses with the best credit.
Additionally, failure to pay off a non-recourse debt may leave a borrower's other assets untouched, but the default is still on record, with all that implies for the borrower's credit score.
If anyone need some advice , you may consider Global Capital Commercial who can guide you the best.
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