Can we talk about bridge loan rates for a value-add deal?

My broker in Atlanta argued that paying 350 basis points over SOFR for a 2-year bridge is fine if the exit plan is solid. But my partner thinks anything over 300 is eating too much into our projected profit. Which side makes more sense for a gut rehab on a 50-unit property?

2 comments

2 Comments

noahpark24d ago

Your partner's right about 300, I got burned paying that extra spread on my last deal.

tessac2524d ago

Actually, it's not always about the spread number by itself. The total cost matters more. A 350 spread with no lender fees might beat a 300 spread with big points to pay. Did your broker's quote include all the fees? Sometimes that extra 50 basis points looks different when you see the full picture.