My bank manager in Boise pointed out a flaw in my bridge loan strategy

I was setting up a bridge loan for a property flip, thinking I'd just use the standard 12-month term. My manager looked at my numbers and said 'You're not accounting for the three month gap between sale and final payment.' I switched to a 15-month term with a six-month interest-only period to cover that lag. Has anyone else had to adjust their timeline for a similar reason?

2 comments

2 Comments

the_sandra6d ago

Actually, that three month gap is usually covered by the buyer's deposit, so your first plan was probably fine.

morgan.logan6d ago

Huh, good point from @the_sandra. But what if the buyer's financing falls through after that deposit? Seen that eat up the whole cushion before closing.