Bridge loans are short-term, interest-only instruments used to acquire, reposition, or hold an asset before permanent financing or sale. Total cost of capital includes origination points, interest carry over the full term, and holding costs. Net carry shows monthly income minus loan payment and operating expenses — negative carry is common on vacant or transitional assets and must be budgeted for. Exit analysis shows either the permanent loan sizing at stabilized value or net proceeds on a sale. Bridge is a tool, not a solution — the exit must pencil before the bridge makes sense.

Construction loan amount is the lesser of: (LTC % × total project cost) or (ARV cap % × stabilized value). This is how most lenders actually underwrite it — the ARV cap is the hard ceiling regardless of cost. Interest carry on the average draw method estimates interest on the drawn balance using your selected average draw percentage over the construction period. Actual interest depends on the draw schedule and timing. Origination points are charged on the full loan commitment at closing, not on drawn balance. Perm loan payment is calculated at the end of construction on the permanent loan amount (perm LTV × ARV).

BRRR analysis runs three phases in sequence. Phase 1 calculates total project cost and hard money carry. Phase 2 calculates the refi loan at ARV × LTV, how much cash is returned, and what remains in the deal. Phase 3 runs DSCR on the refi loan payment against effective rent (gross minus vacancy and management). DSCR is PITI-based — the standard for residential DSCR lenders. HOA and maintenance are cashflow deductions only, not included in DSCR. The goal is to return as much capital as possible while maintaining positive cashflow and a qualifying DSCR.

DSCR is calculated on effective rent (gross rent minus vacancy and management), not gross rent. This matches the stricter lender-side underwriting standard. HOA is deducted from cashflow only — not from DSCR — which is how most lenders treat it. Most DSCR programs for 1–4 units require 1.20–1.25 minimum. Some lenders use P&I only — toggle above to compare. Does not account for maintenance or reserves.

Multifamily (5+ units) is underwritten on NOI, not PITI. DSCR = NOI / Annual Debt Service. Expense ratio mode applies your selected percentage to Effective Gross Income — useful for quick deal screening. Full breakdown mode allows line-item accuracy for deeper underwriting. Per-unit metrics are how lenders and operators compare deals across markets and asset classes. Debt yield = NOI / Loan Amount — increasingly used by agency and bridge lenders as a secondary underwriting metric alongside DSCR. Does not account for depreciation, loan fees, or tax treatment.

NOI = Effective Gross Income minus all operating expenses. Debt service is not an operating expense — it sits below NOI. DSCR = NOI / Annual Debt Service. Debt Yield = NOI / Loan Amount — some larger commercial lenders underwrite to this instead of or alongside DSCR. LTV requires a purchase price entry. Commercial lenders typically require 1.20–1.35 DSCR depending on asset class and loan type. Does not account for depreciation, loan fees, or tax treatment.

Global DSCR = Annual SDE (or EBITDA / Net Income) divided by total annual debt service including existing obligations and the new loan. SBA requires DSCR of 1.15–1.25 minimum depending on lender overlay. Owner compensation must be covered within the SDE figure. 7(a) maximum per loan is $5M. 504 SBA debenture maximum is $5.5M. As of July 4, 2026, eligible borrowers can combine a 7(a) and a 504 for up to $10M in total SBA-backed financing — the two programs are now treated independently. Above $10M combined requires conventional, USDA, or structured financing. Rates shown are illustrative — actual SBA rates are variable and set at closing.