Hi mark Kohler Here with another tax and Legal tip
Talking Non-recourse Loans Now This is a Unique feature of Types of Loans that can Help You out strategically in Business and real estate
First Let's Talk about What a non-recourse Loan Is and then Where we can use it in two or three instances the non-recourse loan Is
Really a
Feature Which Allows The creditor or Doesn't allow Their creditor to come after the borrower?
So for Example if i borrow Money from you and i say i want a non-recourse
You can't come after me if i default you can Only go have?
Recourse or go after The asset that may secure the loan so maybe i give you the title to my car
you can Go after My car and repossess it but You can't come after me personally if my car
Doesn't Satisfy The Loan When i default That's a non-recourse Loan They do not Have recourse
Against the Borrower as an individual Now Let's talk about where you might see a non-recourse Loan the most
Common Is in real estate Where if You've Seen My videos before We Have our operations side and we Have our asset side
Watch Those Other videos You'D Love This method of
Analyzing Your Business over Here you might have a piece of real estate with a bank and
an llc
With a Borrower well in a Typical Loan You might see the borrower guarantee the Loan but in a non recourse Loan
The Bank can Only has a First trust Deed against the property and they can't come after
The Borrower Themselves the trust Deed or
Lien Against The Property is Their Only recourse it'S non recourse against the person
The Second error You might See this in real estate and i love it is with iras or
Retirement plans down Here you might have an ira or self-directed retirement
Plan That Sets Up an llc and Buys real estate and can Still Get Loans to
Build the portfolio of The ira the ira can own real estate and have a Loan Against That
Most non recourse Lenders are going to ask for about 40% down and want
To see about a 10% cash reserve Inside the llc but hey?
That's Fifty Percent of the capital in an ira and that means if i had a Hundred grand in an ira i could buy two
Properties
Using 40% down on two properties and have a Ten Percent reserve for both
So Instead of Buying One property with a Hundred grand i could buy two properties worth Two Hundred grand With a non-recourse Loan
The Second area You might see a non-recourse Loan Is in corporate Credit so Here's Your S corporation and
Here's The Owner of the Company i a
Line of Credit With corporate Credit means the Bank
Provides The Line of Credit and May Only Just give That line of Credit to the company Without any recourse
Against the Owner of the Company
Most corporate Credit strategies involve Working Towards This where the
Loan Is in the name of the Company and
Without You as a Guarantor Now It takes a Long time to get there and Watch some of my Other videos on corporate Credit
Study Up well on that but This is What a non-recourse Loan is all about in Summary
Non-recourse Lending Is a
Reality it's for real and There's Certain Things Out There that it Will again Help You in real estate or in the corporate Credit
Strategy Build That line of Credit off Your Credit score off your fico score
So think about it it could be a Good fit for you
Thanks for Listening and i hope That Information Was helpful and Let Me speak from the heart Here i've Been talking about
Topics Like This for 10 15 Years i'm a cpa attorney Best-selling Author Radio Show host and i am passionate about
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