Bridge Loans Atlanta

A bridge loan is short-term financing until you sell or refinance. Wikipedia explains that hard money names the lender, while bridge names the loan’s job, so many bridge loans come from hard money lenders.

Wikipedia gives a range of 2 weeks to 3 years. Lendersa lists 12 to 24 months as typical for hard money loans. Ask what an extension costs before you sign.

Lenders size the loan on loan-to-value (LTV) from the appraisal. Wikipedia says bridge LTV generally stays under 80% for residential and 65% for commercial property. Terms vary by lender.

Expect a higher rate than a bank, plus points. Wikipedia says 2 to 4 points may be charged on terms up to 12 months. On a $300,000 loan, 2 points is $6,000. Get a term sheet.

That plan is your exit strategy: sell the property, or refinance into a long-term loan. Investors and lenders on BiggerPockets have pointed to a DSCR rental loan as a common way out for a rental held in an LLC.

Many DSCR lenders want seasoning, a waiting period before they use the new appraised value. One BiggerPockets post put it at 3 to 6 months. Plan your holding costs around that wait.

A BiggerPockets post on moving a bridge loan into a DSCR loan lists three things: a signed 12-month lease, proof the rent and deposit hit your bank, and a list of the work you did for the appraiser.

Usually not. These are business loans for investment property. Wikipedia notes private lenders stick to business loans to stay outside home mortgage rules like the Dodd-Frank Act.

Often, yes. Wikipedia notes bridge lenders may ask for cross-collateralization, where a second property also secures the loan. It can lower your cash in, but both properties are then at risk.

Ask your lender for an extension first. It usually costs a fee. Investors on BiggerPockets also mention selling, bringing in a partner, or a DSCR loan if the rent covers it.