Bridge loans are short-term by design — typically 6-24 months. Every bridge loan is a countdown toward a specific exit. Bridges without clear exits are how investors end up paying 10% interest on a property that should have been sold or refinanced six months earlier.
The Three Exits
- Sell the property — fix-and-flip, or BRRRR that didn't pan out
- Refinance into long-term financing — BRRRR, or changed strategy mid-project
- Pay off with other capital — 1031 exchange or sale of another asset
Picking the exit at origination — not month 11 — is the difference between control and panic.
Exit 1: Sell the Property
Once finished, most markets absorb a well-priced flip in 15-45 days. Add 30-45 days for closing. Plan your bridge term to give yourself at least 90 days from "rehab complete" to "wire hits account."
Key decisions:
- List with an agent or FSBO? Most flips sell faster with an agent. The 5-6% commission is built into your MAO.
- Price aggressively. First two weeks of listing get the most traffic. Listing high and reducing is how flips sit 90 days.
- Back-up plan. If no offers in 45 days, have a DSCR refi pre-qualified as Plan B.
Exit 2: Refinance to DSCR (BRRRR Exit)
The classic BRRRR exit. Property is stabilized, rented, and you refi into a 30-year DSCR loan to pull your capital out.
Seasoning requirements:
Most DSCR lenders (including Pimlico) require 3-6 months of ownership before a cash-out refinance. On a 6-month bridge, you can refi starting month 4-5 — don't wait until month 11.
Rate-and-term vs. cash-out:
- Rate-and-term refi — pays off the bridge at cost basis. Better pricing, no seasoning concerns. Best when you haven't built much equity.
- Cash-out refi — pays off bridge + returns capital to you. Requires appraisal to come in high enough; subject to seasoning.
The BRRRR Refi Stack
Pimlico often originates both the bridge and the DSCR refi on the same property. We already know the borrower, the property, and the rehab scope — which cuts the refi close time to 14-21 days from complete file.
Exit 3: 1031 Exchange
If you're selling one property to buy another and want to defer capital gains, a 1031 exchange can tie your bridge payoff to your next acquisition. You have 45 days to identify and 180 days to close — and your qualified intermediary handles the bridge payoff.
This exit requires planning. Talk to your QI before you list the sale property.
What Happens if You Miss the Exit
Most bridge loans offer extensions — usually 3 or 6 months — for an extension fee (typically 0.5-1% of loan amount). It buys time but costs money. Better to plan the exit correctly from day one.
If you miss and can't extend: default, forced sale, or foreclosure. This is rare with good communication, but it happens when borrowers ghost their lender.
Pick Your Exit Before You Close
Every borrower we fund knows their exit before signing. Flip in 6 months? Rental refi in 10 months? Hybrid — list it, and if it doesn't sell in 90 days, refi to DSCR? Write it down. Share it with your lender. Build your bridge term around it.
The bridge is a tool, not a destination. Know where you're going before you get on it.
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