In this episode of the Midwest Multifamily Exchange, we dive deep into the critical differences between recourse and non-recourse debt. Understanding these two types of debt is essential for anyone looking to grow their multifamily portfolio, especially when deciding how much personal liability you’re willing to take on. I break down the pros and cons of each type, from the flexibility and relationship benefits of recourse loans to the lower rates and non-liability advantages of non-recourse, or agency debt. Whether you’re just starting in multifamily investing or looking to expand your knowledge of financing options, this episode provides valuable insights to help you make more informed decisions.

Join me as I cover the key considerations, costs, and strategies for both loan types, and discover when it makes the most sense to use each one. Plus, I'll share tips on building strong relationships with lenders to secure the best terms for your deals. You won’t want to miss this comprehensive guide to navigating multifamily financing!

Timeline Summary:

[0:00] Introduction to recourse and non-recourse debt.

[1:13] Explanation of recourse loans: personal liability, approval process, and building bank relationships.

[4:30] Pros and cons of recourse loans: flexibility, higher rates, and negotiation tips.

[9:04] Overview of non-recourse (agency) debt: requirements, rates, and the broker process.

[13:10] Key considerations when choosing a broker for agency debt.

[16:03] Cons of non-recourse debt: higher upfront costs, legal fees, and prepayment penalties.

[21:11] Recap on why non-recourse might be the better option for larger deals.

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