Execution path
Bridge Loans
Short-to-medium term financing that bridges the gap between your current situation and your next permanent solution. More flexible than hard money, more forgiving than conventional.
What It Is
A bridge loan is exactly what the name says — it bridges you from where you are to where you're going. It's designed as a temporary solution with a defined exit: either you sell the property, refinance into permanent financing, or stabilize to qualify for a better loan. Bridge loans are faster and more flexible than conventional mortgages, but more forgiving and lower cost than hard money for many situations.
Typical Terms
Interest rate
7–11% annually
Loan term
6–24 months
LTV
65–75% of as-is or ARV
Points
1–3 points
Repayment
Interest only during term
Approval time
5–14 days
Common Use Cases
BRRRR — Phase 1
Funds acquisition and rehab while you stabilize the property and establish rental history. Refinanced into a conventional loan once the property qualifies.
Between sales
You've sold one property but haven't closed yet. A bridge loan lets you buy the next one before receiving your proceeds.
Repositioning a commercial property
The property isn't stabilized enough for a permanent loan yet. Bridge loan gives you 12–18 months to lease up and qualify for permanent financing.
Time-sensitive acquisition
You found a deal that needs to close in 10 days. Bridge financing can move faster than conventional lenders.
Bridge vs. Hard Money
People often confuse bridge loans with hard money. They're related but distinct:
Bridge Loan
- — Slightly lower rates (7–11%)
- — More documentation required
- — Often for partially stabilized assets
- — Institutional or bank-affiliated lenders
- — Typical for BRRRR refi bridge
Hard Money
- — Higher rates (9–14%)
- — Minimal documentation
- — For distressed, uninhabitable assets
- — Private lenders, faster decisions
- — Typical for fix & flip acquisition
The Critical Rule
Always know your exit before you take a bridge loan. If you can't answer "how does this get paid off?" with specificity — don't take the loan. Bridge loans that can't be refinanced or sold on time become very expensive very fast.