Question about bridge loans

[Daniel McCain]

We purchased a property with cash and were implementing the BRRRR strategy. After a couple months of rehabbing the property we got a tenant in place. We talked to several different lenders about a cash out refinance loan (30 year, fixed) and were told we wouldn't be able to refi until the property had been "seasoned" for 6 months. It seems a "seasoning" period is a pretty common requirement for traditional lenders. In researching avenues to get past this speed bump toward our next project I discovered bridge loans. So, I wanted to see if anyone could provide some insight on how bridge loans work and if this would be an appropriate loan for our situation. Thanks.

[Theo Hicks]

Bridge loans are short-term (6 months to 3 years with extension options). Typically they are interest-only, have higher interest rates, and are recourse to the borrower. They typically include funding for capex projects and are secured on assets that don't qualify for conventional financing.