A financing option that is typically a term length of 1 to 3 years that allows investors to acquire property quickly as a bridge between acquisition and stabilization for long-term refinancing or the sale of the property for maximized profit. There are two major types of real estate property types that work with this style of financing and they are residential and commercial real estate projects that most often include development, construction, or renovation of the existing property.

Residential projects are typically financed for 12 months or less with an ability to request up to 2 six month extensions. The loans are most often set up as monthly repayments on an interest-only basis. A few of our lenders can offer escrow of payments to be rolled into the loan costs and then the escrow account pays the interest each month that the loan is open. The savvy investors of individual to mid-sized properties prefers to turn their invested funds twice within the same year in an effort to obtain optimal returns, which means turning properties every 6 months. These loans do not usually incur any pre-payment penalties.

Commercial or large-scale residential construction projects most often begin with 24-month terms, but have the ability to extend up to as many as 60 months, depending upon location and size of the real estate project. These loans are typically designed for on-going monthly repayment, but some of the sources of funding include a true deferral of interest payment until either the end of the loan term or a certain percentage of sales or rental occupancy occur that trigger immediate investor responsibility for monthly repayment. This style works well for ground-up construction goals of an under-developed property that is being purchased and time is necessary for final development, permitting, and the final copy of detailed architectural drawings to be completed and then the loan can either end when a new construction loan comes into payoff the initial acquisition bridge loan or the original financing includes construction financing within the acquisition loan. Short-term loans often come with a minimum amount of 6 months’ worth of interest to be paid in full regardless of how long the loan remained in place.

Each of the loan options listed below are NOT based upon the borrower or guarantor’s personal earnings instead they are based upon collateral, equity, plan, and potential short-term appreciation. All you need to begin this financing is a credit score in the mid-600 range or higher, sufficient assets to cover down payment and closing costs, and some real estate market knowledge. Partnerships and Joint Ventures are common and recommended to help accelerate the expansion of the investor’s Real Estate Empire.