v2.12 - No Investor Left Behind: Recourse vs. Non-Recourse Debt

Can you imagine borrowing millions for a real estate property, but not having to personally guarantee the loan? That’s the reality of non-recourse debt – and it’s one of the biggest differences between residential and commercial real estate lending.Dustin and Adam break down how non-recourse loans work, why lenders care more about an asset’s income than the borrower’s personal ability to repay, and what Freddie Mac considers a “small balance” loan (hint: the minimum is $1 million).For passive investors, the debt structure of a deal tells you a lot about the sponsor’s risk management. Understanding how recourse and non-recourse loans work (and when a lender might require personal guarantees) helps you ask better questions during due diligence and spot red flags before you invest.Watch episode on YouTube: https://www.youtube.com/watch?v=60EvbVkCvAgSee all Wealth Independence episodes at https://www.wealthindependencepod.comConnect with Dustin:Big Spring CapitalLinkedIn (/in/TheDustinBailey)Twitter/X (@TheDustinBailey)Connect with Adam:Bidwell CapitalLinkedIn (/in/AdamJPenn)This show is for informational purposes only and is not financial, investment, legal, or tax advice, and does not constitute an offer to buy or sell securities. All investments carry risk, and investors should always conduct thorough due diligence and consult with qualified professionals before investing.