“Time kills all deals.”
This saying rings especially true in real estate investing, where hesitation or financing delays can cost you a prime property. The average closing time for a traditional mortgage is 30 to 60 days—and in competitive markets, that’s simply too long.
If you're looking to expand your portfolio with multifamily properties, waiting on conventional financing could mean losing out on profitable opportunities. This is where bridge loan deals come in. A real estate bridge loan gives investors fast access to capital, helping them secure properties quickly while arranging long-term financing in the background.
So, how do multifamily bridge lenders help you move faster? And what should you know before consulting a direct hard money lender? Let’s break it down.
What Is a Bridge Loan and How Does It Work?
A bridge loan is a short-term financing option designed to "bridge" the gap between acquiring a property and securing permanent financing. These loans typically last 6 to 24 months, providing real estate investors with quick liquidity to purchase, renovate, or stabilize a multifamily property before refinancing into a long-term loan.
How Bridge Loan Deals Work in Multifamily Investing
- You Identify a Profitable Property– A multifamily property hits the market, and you want to act before someone else snatches it up.
- You Secure a Real Estate Bridge Loan– Instead of waiting months for traditional financing, you work with multifamily bridge lenders to get funds within a few days to weeks.
- You Improve or Stabilize the Property– Use the funds to make renovations, increase occupancy, or improve cash flow.
- You Refinance into a Long-Term Loan– Once the property’s value and financial performance improve, you refinance with a lower-interest, permanent mortgage.
This strategy allows investors to scale their real estate investing goals without waiting for lengthy bank approvals.
Why Bridge Loan Deals Are Game-Changers for Multifamily Investors
1. Speed Matters—Beat the Competition
With conventional lenders taking 45+ days to process loans, real estate bridge loans give you a major advantage. Bridge loans can close in as little as 7–14 days, ensuring you don’t lose a deal to someone with faster financing.
2. No Need to Wait for Perfect Credit or Income History
Banks often have strict underwriting requirements that slow down the process. Multifamily bridge lenders focus on the property’s potential rather than just your financial profile. This makes bridge loans a great option if you:
- Are self-employed with fluctuating income
- Need funds quickly for an off-market deal
- Are still improving your credit score
3. Renovate, Stabilize, and Add Value Before Refinancing
Many multifamily properties require upgrades or better management before qualifying for traditional financing. Bridge loans allow you to buy distressed properties, renovate them, increase rental income, and qualify for better refinancing terms.
Example:
You purchase a 12-unit multifamily property with a 60% occupancy rate using a bridge loan. You renovate vacant units, increase rents, and raise occupancy to 95%. After 12 months, you secure long-term financing at a lower interest rate based on the improved cash flow.
4. Flexible Lending Terms
Unlike traditional banks, direct hard money lenders offer:
- Higher loan-to-value (LTV) ratios (up to 80-85% in some cases)
- Interest-only payment options
- Less red tape, making approvals much faster
This flexibility makes real estate bridge loans an excellent tool for investors looking to scale their portfolios without waiting on banks.
What to Watch Out for When Using Bridge Loans
While real estate bridge loan deals offer speed and flexibility, there are a few things investors should keep in mind:
- Higher Interest Rates– Expect 8–12% interest rates, higher than conventional loans. However, because bridge loans are short-term, the total interest paid is often manageable.
- Shorter Repayment Terms– Most bridge loans need to be repaid within 6–24 months, so you must have a clear plan for refinancing or selling.
- Exit Strategy Is Key– Before taking out a bridge loan, have a solid plan to refinance, sell, or improve cash flow. Lenders will want to see how you’ll repay the loan.
- Closing Costs and Fees– Some bridge loans come with origination fees, appraisal costs, and higher closing fees, so factor these into your investment calculations.
When Should You Use a Bridge Loan for Multifamily Investing?
A real estate bridge loan is a powerful tool, but it’s not for every deal. Use bridge financing when:
- You need to secure a high-value property quickly in a competitive market.
- You’re purchasing a fixer-upper or underperforming asset that needs improvements.
- You want to increase rental income and occupancy before refinancing.
- You plan to sell the property within 1–2 years for a quick return.
If you’re holding a property long-term with stable cash flow, traditional loans may be a better fit.
Get Fast, Flexible Financing with InstaLend’sBridge Loan Deals
If you're looking for fast funding solutions to close multifamily deals without waiting for traditional financing, InstaLendcan help.
As a direct hard money lender, we specialize in bridge loan deals designed for real estate investors. Whether you're securing a new property, renovating a multifamily asset, or scaling your portfolio, we offer:
- Fast approvals and funding in as little as 7–14 days
- Flexible terms tailored to your investment strategy
- Higher LTVs to maximize your purchasing power
- Interest-only payment options to keep cash flow strong
- No prepay penalties
Don't let delays cost you a profitable deal. Contact InstaLend to apply today and move forward with confidence!
