Short-term investor capital
Bridge Loans for Investors
For when the deal is right but the timing is not. Short-term, interest-only money against the property, with a defined exit.
A bridge loan solves a timing problem, not a money problem. You found the deal. The money is tied up in another property, or you bought all cash and need it back, or the house will not pass a normal lender's condition standards until something gets fixed.
Conventional lending is not built for any of that. Bridge lending is.
The shape of the loan
| Lien position | First lien only |
| Payment | Interest only |
| Term | 6 or 12 months, with extension options |
| Extensions | Typically 3 months at a point, case by case |
| Loan size | Roughly $75,000 to $3,000,000 |
| Occupancy | Non-owner-occupied, business purpose only |
| Minimum property value | Around $50,000 as-is |
| Impounds | Usually not required |
| Subordinate debt | Generally not permitted |
Rates and leverage move with your credit, your experience and the deal itself, so I will not print a rate here that is wrong by the time you read it. Send me the deal and you get a real number.
Three ways people use it
Buy fast, refinance after
You need to perform on a short escrow and there is no time for a full underwrite. Bridge closes it. Then you refinance into long-term rental financing once the dust settles. DSCR loans.
Pull cash back out of a property you bought all cash
Delayed financing. You win with a cash offer, then recapitalise. The loan amount is normally based on what you actually paid, per the final settlement statement, not a fresh appraisal. There are seasoning rules, so do not wait a year to ask.
Hold a property that cannot qualify yet
Deferred maintenance, a vacancy, a tenant situation, a condition issue an appraiser will flag. Bridge carries it while you fix the thing that is blocking permanent financing.
The exit is the whole underwrite
This is the part newer investors underestimate. The lender is not really lending against the property. They are lending against how you get out.
If your exit is a sale, expect real profit to be required in the deal, commonly tested as after-repair value times roughly 85%, minus everything you put in to acquire and fix it. If the profit is thin, leverage gets cut and you will be asked for a written explanation of how you will still make it work.
If your exit is a refinance, the underwriter checks up front that you would actually qualify for the long-term loan: your credit, the loan amount, the leverage, and whether the rent covers the payment. "I will figure it out later" is not an exit.
What is not allowed: refinancing one bridge loan with another bridge loan from the same shop. That is a treadmill, and lenders have learned to say no.
Cash-out rules worth knowing early
- Usually no cash out at all on a property you have owned under six months.
- Owned under twelve months, value is typically your purchase price plus documented improvements, not a new appraisal.
- The cash out has to be for a business purpose, and you will sign a letter saying so.
The costs nobody mentions until closing
Bridge money is expensive on purpose. Beyond the rate:
- The default rate is brutal. Commonly 18%. It exists to make sure the loan pays off on time.
- Extension fees. A point every three months adds up.
- Interest is often charged on the whole loan amount from day one, including rehab money still sitting in escrow, unless your budget or experience earns a different method.
- Interest reserve accounts may be required at the lender's discretion, which reduces your net proceeds.
None of that is a reason to avoid bridge financing. It is a reason to know your exit date before you sign.
Not a bridge loan: buying your next home first
I get this call weekly, so it is worth stating plainly. If you want to buy your next home before selling your current one, an investor bridge loan will not work. You cannot occupy the property.
There is a different program for that. Buy before you sell.
Send me the deal
Address, purchase price, your money in, what needs doing, your exit and your timeline. That is enough for a real answer.
Questions people ask
Can I live in a property financed with a bridge loan?
No. These are business-purpose loans. You sign an affidavit confirming it, and you are prohibited from occupying the property as a primary or secondary residence at any point during the loan term. If you want to buy your next home before selling your current one, that is a different program.
How fast can a bridge loan close?
Much faster than conventional financing, because the file is about the property and the exit rather than your tax returns. The honest answer depends on title, the valuation and how quickly you get documents back. I will give you a real timeline once I see the deal, not a marketing number.
What happens if I cannot pay it off at the end of the term?
Extensions are usually available, commonly in three-month increments for a fee, and they are granted case by case rather than automatically. If nothing pays it off, the loan goes into default and the default rate is far higher than the note rate. This is why the exit plan is underwritten as hard as the property.
Can I close in an LLC?
Yes. LLCs, limited partnerships, general partnerships, corporations and revocable trusts are typically acceptable. Land trusts, blind trusts and entities managed by non-owners generally are not. Owners above a threshold normally sign a personal guaranty.
I bought a property all cash. Can I pull my money back out?
Often yes, through delayed financing, if you are inside the window after purchase. The loan amount is usually based on your acquisition cost from the final settlement statement rather than a new appraised value. There are seasoning rules, so the sooner you ask the better.