12d • General discussion
📘 Teaching Tuesday 📘
Why Exit Strategy Matters More Than Rate (Bridge Loans)
Most borrowers focus on interest rates, whereas the lenders are focused on the exit. In renovation and ground up financing, loans are short-term. That means the most important question isn't, "What's the rate" Its: "How are you paying this off?"
🧠 The Reality
Private loans are typically repaid through one of these channels
- Sale of the property
- Refinance into 30 Year DSCR
📊 Why Lenders Care So Much
Lenders evaluate:
- Realistic renovation timelines
- Market rent assumptions
- Current refinance environment
- Liquidity Reserves
A strong exit strategy will lower risk for the lender and borrower
🎯 The Takeaway
In private lending:
Rate affects profitability in the long-term
Exit strategy determines success in the short-term
💬 What’s your preferred exit, sell or refi?
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📘 Teaching Tuesday 📘
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