When Does a Bridge Loan Actually Make Sense?

Question

In your experience, what situations truly justify bridge financing versus waiting for permanent debt? Curious how others weigh speed vs. cost.

Stacy Raskin · Answer

Bridge financing can make sense if the speed will make the difference in securing a good deal such as in a county tax sale when properties are being that have defaulted on tax debt and will not wait 21-30 days for a longer term loan to close.

Hard money loans (HML)s can make sense to scale and if doing BRRRR to rehab the property and looking to convert it to long term financing such as a DSCR loan when rehab is complete. Happy to connect to discuss further.

Michael Wyatt · Answer

I can close a bridge loan in 48 hours if need be.  So if you need to scoop something quick yes it will cost you a couple extra bucks but you have an interest only loan and can maybe make some of that up with the extra cash flow.

Bridge also makes sense sometimes towards the end of a hard money loan term if the lender isn't offering an extension and you need a little more time to refi.

Andrew Lee · Answer

When hard money bridge loans make sense:

✅ You need to close fast
✅ The property isn’t bankable yet
✅ You have a clear exit (refi or sale)
✅ You’re creating short-term value (rehab, lease-up)
✅ You’ve got strong equity / low LTV

Chris Seveney · Answer

Bridge loans can be expensive, so if you do not need one, then I would not get one, but lets say you have equity in a deal and another deal pops up, it would be great to get a bridge loan on that asset until you secure permanent financing or sell to take advantage of that other deal. This is a case study we see often.

Jake Yuskaitis · Answer

when you have the need for speed or the loan structure calls for it.

construction, fix and flip, rehab and hold, etc.

When Does a Bridge Loan Actually Make Sense?

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