Bridge loan

A short-term loan (6-24 months) used to acquire or rehab property before refinancing to long-term debt.

Bridge loans fill the gap between purchase and stabilization. Used heavily for BRRRR (buy, rehab, refinance) and value-add multifamily. Rates run 8-12% (vs 6-8% for permanent financing), often interest-only, with 1-3 origination points. Loan-to-cost typically 70-85%. Common bridge lenders: hard money lenders for SFR, debt funds for small multifamily. The math only works if your refi cash-out at stabilized NOI pays off the bridge AND ideally returns your initial capital — the BRRRR thesis.