What Is A Bridge Loan In Commercial Real Estate
JB
Jeremiah Boucher Founder, Patriot Holdings • Author of Finding Your Edge
Key Takeaways
- Bridge loans are short-term (1-3 year) financing used to acquire and stabilize a property before refinancing into permanent debt.
- Bridge debt is more expensive (8-12%) but allows you to close quickly and execute a business plan.
- Your exit strategy from bridge debt must be clear — either refinance into agency/CMBS or sell at a higher basis.
- Factor bridge loan costs (higher interest, origination fees, extension fees) into your underwriting — they eat returns if you're slow.