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Commercial bridge loan calculator
A value-add bridge loan is sized off two caps at once, a share of total project cost and a share of the after-repair value, and the lower one governs. Its cost runs past the rate: monthly interest carry, origination points, an exit fee and the costs of selling together set the sale price the deal must reach to break even.
What does a sample value-add bridge deal cost?
| Input | Value |
|---|---|
| Purchase price | $1,500,000 |
| Rehab budget | $400,000 |
| After-repair value | $2,300,000 |
| Hold period | 12 months |
| Interest rate | 10.50% |
| Origination points | 2.00% |
| Exit fee | 1.00% |
| Selling costs | 3.00% |
| Cost cap | 80.00% |
| Value cap | 70.00% |
Annualized return on cash22.07%
- Total basis: $1,500,000 purchase + $400,000 rehab = $1,900,000.
- Cost leg: $1,900,000 × 80% = $1,520,000. Value leg: $2,300,000 × 70% = $1,610,000.
- The lower leg governs: a $1,520,000 loan and a $380,000 down payment.
- Carry: $1,520,000 × 10.50% ÷ 12 = $13,300 a month, or $159,600 over twelve months.
- With 2 points ($30,400) and a 1% exit fee ($15,200) the all-in cost of capital is $205,200.
- Selling costs at 3% of $2,300,000 are $69,000, so the breakeven sale is ($1,900,000 + $205,200) ÷ 97% = $2,170,309.
- Profit: $2,300,000 − $69,000 − $1,900,000 − $205,200 = $125,800.
- Cash in before the sale: $380,000 down + $30,400 of points + $159,600 of interest = $570,000, so $125,800 is a 22.07% return over the twelve-month hold.
The cost cap governs, so a stronger finished value would not raise this loan; a smaller budget or a higher cost cap would. Bring $410,400 to closing and $13,300 a month after it, and every dollar of rehab overrun comes out of the $125,800 profit.
How is a bridge loan sized and priced?
Loan = lesser of (Cost cap × (Purchase + Rehab)) and (Value cap × ARV) Cost of capital = Monthly carry × Months + Points + Exit fee Breakeven sale = (Purchase + Rehab + Cost of capital) ÷ (1 − Selling costs) Cash in = Down payment + Points + Interest Annualized return = Profit ÷ Cash in × 12 ÷ Months
- 20,000+loan programs screened
- 5–8matches on a typical deal
- under an hourto the median first offer
- Zero upfrontto submit and compare offers
How do you read the result?
Read the breakeven sale price first. Everything above it is profit and everything below it is a loss the equity absorbs, so a plan that only works at the top of the comparable range has no margin for a slow lease-up or a contractor overrun.
The return is on all the cash in before the sale, annualized without compounding, and it is not an IRR. It charges interest on the full loan from closing, which understates the return when the rehab funds in draws; use it to compare structures. A draw-by-draw IRR needs the schedule your contractor and lender agree on.
Frequently asked questions
Why is the cost of capital more than the interest?
Interest runs on the loan, points are charged at closing and many programs add an exit fee at payoff. Comparing quotes on rate alone hides the last two, so this calculator rolls all three into the breakeven price. It charges interest on the full loan from closing, as on a fully funded loan; if your lender charges only on drawn funds, carry is lower.
Is this a bridge loan quote?
No. It is scenario math on your inputs; the rate, points, exit fee and caps come from a lender’s underwriting after a deal is submitted.
Does the profit figure include selling costs?
Yes, at the rate you enter: commissions, transfer taxes and closing costs on the sale, as a share of the price. The figure here is a sample; use your broker’s and your state’s.
What happens if the rehab runs over budget?
The overrun usually comes out of equity, because the loan is already sized at a cap. Raise the rehab figure here to see the effect on breakeven and return.
What does YieldStack do?
YieldStack is a commercial mortgage brokerage. Every term sheet comes from a lender in the network and is subject to that lender's underwriting.
Does it cost anything to see terms?
No. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
Is financing guaranteed?
No. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
Where does YieldStack operate?
Nationwide. YieldStack arranges commercial real estate financing nationwide. Every deal is business-purpose commercial financing, and the broker fee is paid only at closing.
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YieldStack is a commercial mortgage brokerage.