What are they? Short-term loans (6 months - 3 years) used to finance commercial or multifamily properties until long-term funding is secured or the property is sold.
Why use them? For fast acquisitions, renovations, property stabilization (lease-up), or covering financing gaps.
Key Benefit: Speed! Much faster closing (often 2-4 weeks) than traditional commercial mortgages (60-90+ days).
Downsides: Higher interest rates and fees compared to permanent financing. Requires a clear exit strategy.
Why Khojie? We specialize in navigating the bridge loan market, offering expert guidance, access to specialized lenders, competitive terms, and efficient processing.
What Are Commercial & Multifamily Bridge Loans?
Imagine you've found the perfect apartment complex or office building, but it needs significant renovations before a traditional bank will touch it. Or maybe you need to close a deal faster than a conventional lender can move. That's where a bridge loan comes in!
Think of it as a short-term financial bridge (hence the name!) that gets you from point A (acquiring or improving a property) to point B (securing stable, long-term financing or selling the property). These loans provide quick access to capital, typically for 6 months to 3 years, for commercial real estate (like offices, retail, industrial) and multifamily properties (apartment buildings).
How They Differ from Traditional Loans:
Speed: Bridge loans close significantly faster (often 2-4 weeks with Khojie) compared to the 60-90+ days typical for conventional commercial mortgages.
Term Length: Short-term (6-36 months) vs. long-term (10-30 years).
Interest Rates: Generally higher to compensate for the speed, flexibility, and shorter term.
Focus: Often more focused on the property's potential value (after renovations/stabilization) and the borrower's exit strategy.
💡 Real-World Use: An investor used a Khojie-facilitated bridge loan to buy a vacant office building. They quickly renovated and leased it up over 12 months, then refinanced into a lower-rate, long-term Commercial Mortgage once the property was stabilized and generating income.
How Do These Loans Work? The Process
Getting a bridge loan is typically faster, but still involves key steps:
Consultation & Application: Discuss your project with Khojie. We'll help you gather necessary documents (property details, renovation plans, financials, exit strategy) and submit the application to suitable lenders.
Underwriting & Approval: Lenders evaluate the property's current and/or future value (ARV), your experience, creditworthiness, and the viability of your exit plan. This is often faster and more flexible than bank underwriting.
Term Sheet & Due Diligence: You receive a loan proposal (term sheet). If accepted, the lender conducts final due diligence (appraisal, title search, etc.).
Closing & Funding: Documents are signed, and the loan is funded – often much quicker than traditional routes.
Loan Term & Exit: You execute your plan (renovate, lease up, etc.) and then implement your exit strategy (sell or refinance) before the bridge loan matures.
Khojie acts as your expert guide throughout, ensuring transparency and helping navigate potential hurdles for a smoother closing.
Why Choose Khojie for Your Bridge Loan Needs?
Navigating the bridge loan market can be complex. Here's why partnering with Khojie makes sense:
Speed Advantage: We understand the urgency. Our process and lender network are geared towards closing deals faster than traditional banks.
Access to Specialized Lenders: We work with lenders who specialize in bridge financing and understand value-add projects.
Tailored Solutions: We don't offer one-size-fits-all loans. We structure financing that aligns with your specific project and exit strategy.
Expert Guidance: Our team understands the nuances of commercial and multifamily real estate, helping you from initial analysis to securing permanent financing.
Competitive Terms: Leveraging our relationships, we strive to secure the best possible rates and terms available in the bridge loan market.
"Khojie helped us secure bridge financing in 3 weeks to acquire an underperforming apartment building. Their guidance was crucial during the renovation and stabilization phase before we refinanced." - Satisfied Investor
Common Uses for Bridge Loans
Bridge loans are incredibly versatile. Here are some common scenarios where they shine:
Use Case
Why a Bridge Loan Works
Time-Sensitive Acquisitions
Close quickly on a property before competitors or when permanent financing isn't ready.
Value-Add Renovations
Finance the purchase and renovation costs to increase property value before refinancing. Similar to fix & flip loans but for larger properties.
Property Stabilization
Cover costs while leasing up a vacant or partially vacant property to meet permanent loan requirements.
Partner Buyouts
Provide capital to buy out a partner in a commercial property quickly. Consider partner buyout loans for business ownership changes.
Maturing Loan Payoff
Pay off an existing loan coming due when permanent refinancing isn't immediately available.
Requirements & Qualifications
While generally more flexible than conventional loans, bridge lenders still have criteria:
Property Potential: The deal must make sense. Lenders focus on the property's current and/or future value (LTV/ARV).
Solid Exit Strategy: A clear, believable plan for repaying the loan (refinance or sale) is critical.
Borrower Experience: Proven track record in similar real estate projects is highly favorable.
Creditworthiness: While not the primary focus, a reasonable credit history (often 680+) is usually required.
Liquidity/Reserves: Some cash reserves may be needed to cover payments and contingencies.
Not sure if your project fits? Talk to Khojie. We can quickly assess your scenario and advise on the likelihood of securing bridge financing.
Pros & Cons of Bridge Loans
Pros:
Speed: Fast access to capital for time-sensitive deals.
Flexibility: Can finance properties that don't yet qualify for permanent loans.
Opportunity Capture: Secure time-sensitive deals.
Value-Add Potential: Funds renovations/improvements to increase property value.
Cons:
Higher Costs: Interest rates and fees are typically higher than permanent financing.
Short Repayment Terms: Creates pressure to execute the exit strategy successfully and on time.
Fees: Origination points and other fees can be higher.
Exit Strategy Risk: Failure to refinance or sell before maturity can lead to default.
Frequently Asked Questions
How are bridge loans different from hard money loans?
They are similar in being short-term and asset-focused. However, bridge loans often come from more institutional lenders (vs. private individuals for hard money), may offer slightly better rates, and often have more structured underwriting, especially for larger commercial/multifamily deals. Learn more about Hard Money Loans.
What happens if I can't refinance or sell before the bridge loan matures?
This is the main risk. You could face default, potentially lose the property, or incur significant penalty fees. Some lenders may offer short extensions, but having a solid exit plan from the start is critical.
Can I use a bridge loan for ground-up construction?
Depending on the deal complexity and lender, Khojie's network can often facilitate closings in as little as 2-4 weeks, significantly faster than the months traditional banks might require.
Bridge the Gap to Your Next Deal
Don't let financing delays cost you the perfect commercial or multifamily opportunity. Khojie provides fast, flexible bridge loan solutions tailored to your project's needs. Let's build your bridge to success.
