Bridge loan exit strategy — how detailed does it need to be?

Marcus, we (Harrington) declined 3 deals last quarter specifically because the exit strategy wasn't credible. Here's what we want to see: For a sale exit: 3 recent comparable sales in the area, days on market for those comps, and a realistic timeline that accounts for the current market pace. For a refi exit: borrower's projected income at refi time, estimated property value at stabilization, and a specific lender or loan program they're targeting. "Sell or refi" is not an exit strategy anymore. It's a wish.

Lenders got burned in 2022-2023 on deals where the exit didn't materialize. This is the new normal. Adapt.

i've been writing 1-page exit strategy memos for every deal for the past year. takes maybe 20 extra minutes but lenders love it and i've had zero exit-related declines since

Steve's point about 2022-2023 is exactly right. I had 2 borrowers whose bridge exits failed because the market shifted. Now I'm much more conservative about what I call a "credible" exit.

Steve — that's the clearest articulation of what lenders want that I've seen. Going to share this with my team. Jasmine — 1-page memo is the move. Starting that immediately.