What are the benefits to a buyer of Mark to market purchase option? Loan terms have a recourse (partial). What does that mean?
I found an income producing property that’s advertised as a mark to market opportunity. Another point of note is the loan structure. There is an assumable loan on the property. The notes also make mention of a 25% recourse fee with a burn off. 
With that said what are the benefits to a potential buyer in a mark to market purchase and is the burn off period related to an early payout of the loan? Any feedback is appreciated.
[{"id": "iwxclu0", "text": "Mark to market meaning leases are probably below market rent and, as the buyer, you could increase them to market levels (mark to market). The benefits are clear in that you have the ability to increase rent once the lease renews/expires. \n\nI assume the 25% recourse fee pertains to how much of the loan is recourse to the borrower should the borrower not pay and this amount burns off as it gets closer to maturity. If the loan is $1 million, $250k would be recourse to the borrower should the loan default. This amount will burn off as it gets closer to maturity or whatever the provision is stated in the loan documents (could be performance related as well). It is not a fee for paying early as that would be a prepayment penalty fee.", "replies": [], "depth": 1}]