Why Would You Consider Getting an Apartment Bridge Loan?

May 25, 2015

This is an important question in certain types of situations in purchasing a multifamily property, or in refinancing a multifamily property. An apartment bridge loan may be able to help you acquire a property that an agency loan or other high quality type of loan would not.

However, before getting an apartment bridge loan, know that bridge loans have increased risk. If you are not experienced in owning properties in which you have done apartment bridge loans, there could be quite a bit of risk. In that case, I would recommend that you would partner with someone who has owned property involving apartment bridge loans, or at the very least get mentored by someone who does.

Here are some situations that could possibly warrant getting an apartment bridge loan:

1. An apartment bridge loan could possibly be the only type of loan that would allow an investor to acquire a particular apartment complex if the occupancy is too low. An example would be a property that has 60% occupancy. The investor knows that a top quality permanent loan requires 90% occupancy. Getting a bridge loan would allow the investor the way to get the occupancy to 90% and stabilized.

2. The multifamily property has some renovation needed, but it’s too much renovation for an agency loan, bank loan, or other types of high quality loans. And for an apartment bridge loan, renovation needs to be under $2,000 per unit. The apartment bridge loan could be the best way the investor can acquire the property, in order to get the renovation done and then acquire a permanent loan.

3. The particular property has a maturity date coming up soon, and it does not qualify for a bank loan, agency loan, or other type of quality financing. This is an ideal situation for a bridge loan to allow the borrower to keep their property.

4. If a borrower lacks fiscal strength, getting a bridge loan could possibly allow the borrower to acquire the property. An example would be someone whose credit is too low for a high quality type of financing.

Contact us to see if you qualify for our best multifamily, commercial, or bridge loan rates and terms. Keep in mind that one of our specialties is commercial bridge lending. Also, contact us if you would like to discuss your particular commercial lending needs, or if you have questions. Call 214-695-7310 or send an email to info@apartmentloanstore.com

To discover more about our loan products as well as rates and terms, see our Loan Programs page.

Bruce Painter, Director of Marketing, Business Loan Store