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Updated about 6 years ago,
Transitioning from Bridge loan to Traditional (commercial)
Hello BP members,
* tried searching BP for a definitive answer and couldn't find one*
* I need some help understanding the process of moving from Bridge-loan to Traditional-loans* I'm practicing running proForma-charts and evaluating properties ( * using fake Examples to drill in the concepts*).
Can someone explain how exactly would one transition from a Bridge loan to a more Traditional loan?
For instance, If I acquire a property using Creative Financing ( Master-Lease etc..) and were to get a Bridge-loan based on the Asking price of a property, I would then use that money to increase value ( renovations, CapExpenditures etc...).
...Now when I've stabilized the property and I'm ready to move to a traditional-loan, Can I use the money from the Bank's traditional loan to pay off the Bridge loan?...what can be done if the property isn't Cash-flowing enough to provide the bank with a down-payment for the traditional-loan?
In addition: I would assume that it would make sense to use the same lender for both the Bridge and Traditional loan, correct?
Any assistance would be greatly appreciated.