What are they? Short-term loans (6 months - 3 years) specifically for acquiring or repositioning multifamily (5+ units) and mixed-use properties.
Purpose: To "bridge" the gap until the property qualifies for stable, long-term financing or is sold.
Ideal For: Value-add projects (renovations, lease-up), quick acquisitions, properties not yet stabilized for conventional loans.
Key Benefit: Speed and flexibility. Close deals much faster than traditional banks, with underwriting focused on the property's potential (ARV).
Funding Structure: Often includes funds for both purchase and renovation, disbursed in draws. Typically interest-only payments.
Khojie Advantage: Expertise in multifamily/mixed-use deals, access to specialized bridge lenders, fast closings (often weeks, not months), and guidance on structuring the loan and exit strategy.
Found a promising apartment building or a property with ground-floor retail and residential units above, but it needs work or isn't fully leased? Traditional financing might be slow or unavailable. This is where Multifamily & Mixed-Use Bridge Loans become essential tools for savvy investors.
These are short-term (6 months - 3 years) loans designed to provide quick capital for acquiring, renovating, or stabilizing these specific property types before securing permanent financing or selling. They act as a crucial "bridge" over temporary hurdles.
Why Use a Bridge Loan for Multifamily/Mixed-Use?
Acquire Quickly: Beat competitors by closing fast, often in weeks instead of the months typical bank loans require.
Fund Renovations (Value-Add): Purchase properties needing upgrades, finance the rehab, increase rents/value, and then refinance based on the improved state (ARV).
Stabilize Occupancy: Buy properties with vacancies, use the loan term to lease up units, demonstrate stable income, and then qualify for better long-term financing.
Overcome Traditional Hurdles: Finance properties that don't yet meet strict bank criteria for occupancy or condition.
Real-Life Example:
Sarah identified a 10-unit apartment building with below-market rents and deferred maintenance. Using a bridge loan facilitated by Khojie, she acquired the property quickly, funded $100k in renovations over 6 months, raised rents to market rates, and then refinanced into a long-term commercial mortgage based on the higher property value and stabilized income.
The Process: From Bridge to Permanent Financing
Navigating a multifamily or mixed-use bridge loan involves these key stages:
Deal Analysis & Strategy: Define your plan – acquire and stabilize? Renovate and refinance? Quick flip? Develop a detailed budget and timeline.
Loan Application: Provide property details, renovation plans (if any), financials (personal and property), and your clear exit strategy.
Fast Underwriting: Lenders focus on the property's current and potential income/value (ARV), your experience, and the exit plan's feasibility. Khojie connects you with lenders specializing in these property types for efficient review.
Quick Closing & Funding: Secure the property rapidly. Renovation funds are typically disbursed in draws based on completed work.
Execute & Stabilize: Complete renovations, lease up vacant units, and improve the property's net operating income (NOI).
Exit Strategy: Refinance into a long-term loan (e.g., Commercial Mortgage, Agency Loan) or sell the stabilized property before the bridge loan term ends.
Qualifying for Multifamily & Mixed-Use Bridge Loans
Lenders prioritize experienced investors with viable projects:
Real Estate Experience: Proven track record, especially with multifamily or commercial properties, is highly preferred.
Property Viability: Strong location, clear value-add potential, or path to stabilization.
Solid Exit Strategy: A realistic plan to refinance or sell within the loan term.
Equity Contribution: Typically need 15-30% of the total project cost (purchase + rehab).
Creditworthiness: Decent credit (680+ helps) and financial stability are reviewed, but the property itself is key.
💡 Khojie Advantage: Our expertise in multifamily and mixed-use financing helps position your project effectively, increasing approval odds and securing favorable terms even for complex value-add deals.
Bridge Loans for Multifamily/Mixed-Use: Pros & Cons
Advantages:
Speed: Close deals significantly faster than banks.
Value-Add Funding: Finance purchase and renovation costs.
Flexibility: Underwriting focuses on future potential (ARV).
Access to Deals: Enables acquisition of properties needing work.
Disadvantages:
Higher Costs: Interest rates and fees exceed permanent loans.
Short-Term Pressure: Requires efficient execution of the exit plan.
Exit Risk: Refinancing or sale isn't guaranteed.
Experience Preferred: Can be harder for novice investors to secure.
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?
While some bridge lenders might consider it, specialized Construction Loans are typically better suited for building new properties from scratch.
How fast can Khojie help close a bridge loan?
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.
Ready to Finance Your Next Multifamily or Mixed-Use Deal?
Don't let slow bank financing cost you opportunities. Leverage Khojie's expertise and network for fast, flexible bridge loan solutions.
