The Cash Management waterfall is often structured to pay interest before property expenses. If cash flow deteriorates, the loan can remain monetarily current for months, while in non-monetary default because bills aren’t being paid. Be careful, if a vendor places a lien, or if the property decays from a lack of maintenance - your supposed non recourse loan is now at least partially recourse. Whats the point- negotiate your terms with the guy trying to sell you the loan - at the term sheet level. It can be the difference between success and failure.
