CRE Financing Q&A
The questions borrowers and brokers actually ask.
Plain-English answers to the commercial real estate financing questions you'd otherwise ask ChatGPT. Bridge vs construction. DSCR qualification. Mezz. Broker fee splits. No-solicit. How fast a bridge actually closes.
For Borrowers
Bridge, construction, DSCR, mezz, and how they fit together.
How do I get a CRE bridge loan for a multifamily acquisition?
Multifamily bridge loans close in 7–14 days with light docs. You need property address, purchase price, sponsor track record, and an exit strategy (sale, refi, or stabilization). Typical terms: 8–12% interest-only, 12–24 months, 70–80% LTV. Submit the deal, get a term sheet in 24–48 hours, close inside two weeks.
4 min read
What is the difference between a bridge loan and a construction loan?
Bridge loans finance an existing property to acquire, reposition, or stabilize it before refinancing or selling. Construction loans finance the building of a new property (ground-up) or a heavy gut renovation, with funds released in draws as work progresses. Bridge: 7–10 day close, 8–12% IO, 12–24 months. Construction: 3–4 week close, 9–13% IO, 12–24 months with draw schedule.
5 min read
How does DSCR loan qualification actually work?
DSCR loans qualify the property, not the borrower. The lender divides the property's net operating income by the annual loan payment — that ratio (DSCR) must be 1.0x to 1.25x or higher. No W-2s, no tax returns, no personal income docs. Available 30-year fixed up to 80% LTV. Used by buy-and-hold investors, portfolio scalers, and self-employed borrowers.
5 min read
How fast can a CRE bridge loan actually close?
A clean CRE bridge loan can close in 7 to 14 business days from term sheet acceptance. The path: term sheet in 24–48 hours, appraisal ordered week 1, title and environmental in parallel, closing day 10–14. Deals slip when appraisal comes in low, environmental triggers Phase II, or sponsor financials don't match the file. Clean files close fast.
4 min read
Can I refinance a bridge loan into a DSCR loan?
Yes, refinancing a bridge loan into a DSCR loan is one of the most common exits in residential investment property finance. The bridge buys you time to renovate or stabilize the property; the DSCR refi locks in long-term financing once the property cash flows enough to qualify. Standard path: bridge for 6–18 months, then DSCR refi up to 75% LTV on a 30-year fixed.
4 min read
What is mezzanine financing in commercial real estate?
Mezzanine debt (mezz) is subordinate financing that sits between senior debt and equity in the capital stack. It's secured not by a mortgage on the property but by a pledge of equity in the property-owning entity. Rates run 11–15%, higher than senior debt and lower than equity. Used to stretch leverage without raising more equity — common on value-add multifamily, hotel, and development deals.
5 min read
How does a construction loan draw schedule actually work?
A construction loan funds in stages tied to completion milestones rather than at closing. The lender releases each draw after an inspection verifies the milestone is complete. Typical schedule: 5–8 draws over a 12–24 month build, each released within 5–10 days of inspection approval. Interest accrues only on the drawn balance, funded by an interest reserve held back at closing.
5 min read
What is the minimum DSCR to qualify for a rental property loan?
Most DSCR loan programs require a minimum DSCR of 1.0x to 1.25x. At 1.0x the property's NOI exactly covers the loan payment. At 1.25x the property earns 25% more than the payment. Some programs accept sub-1.0x DSCR ("no-ratio") with lower LTV and higher rate. Higher DSCR unlocks better pricing and higher leverage.
4 min read
Which lenders offer CRE construction loans up to 85% LTC?
85% LTC construction loans exist but are not commodity — they're available from a narrow set of private debt funds, specialty construction lenders, and a few balance-sheet banks for sponsors with strong track records. Expect 9–12% blended pricing (often senior + mezz stack), recourse or partial recourse, and a requirement of 2+ comparable completed projects. Most institutional banks cap at 65–75% LTC; getting to 85% means accepting structure (mezz, preferred equity, or partial recourse) or paying a private-capital premium.
5 min read
How do I find a fix and flip lender for a $2M Miami project that can close fast?
$2M is the sweet spot above the hard-money pool (which caps around $1M) and below institutional bridge minimums ($3–5M), so a narrow set of private and specialty lenders dominate it. In Miami, expect 10–12% interest-only, 70–80% LTC including rehab, 12-month term, 7–14 day close if your docs are clean. Insurance pricing post-2024 is the biggest delay risk; condo conversions need special diligence; hurricane code compliance is non-negotiable.
5 min read
Which lenders finance California mixed-use property at high LTC?
High-LTC California mixed-use is a structurally hard product because of CEQA timelines, rent control on the residential portion, and seismic retrofit obligations — but it's financeable. Stabilized mixed-use lands 70–75% LTV on agency-eligible deals (Freddie SBL, Fannie Small Loans) and 75–80% LTV on bank debt for the right sponsor. Construction or value-add mixed-use can reach 75–80% LTC through private debt funds and a few specialty California lenders. Density bonus and transit-oriented development structures can stretch LTC further on entitled deals.
5 min read
Where can I find a CRE financing broker that handles deals from $1M to $50M nationwide?
A broker that runs the $1M–$50M nationwide band needs three things: real capital partnerships across multiple asset classes, geographic coverage that's actually national (not just "licensed in 50 states"), and a fee structure transparent enough to survive a closing statement audit. Most brokers claim this range; few actually execute across it. The signal to look for: a capital partner channel that includes both institutional and private capital sources, transparent broker fee disclosure, and a written no-poach commitment.
5 min read
For CRE Brokers
Finding capital, fee splits, no-solicit mechanics.
How does a CRE broker find a capital partner to fund their deals?
CRE brokers find capital partners through three channels: direct outreach to debt funds and private capital pools, referrals from other brokers and operators, and capital-partner platforms (like Passy Capital's broker channel). The criteria that matter: term-sheet speed (24–48h ideal), fee transparency in writing per deal, no-solicit commitment, and capital range that matches your deal book.
5 min read
What's a typical broker-lender fee split in CRE financing?
Standard CRE broker fees run 1–2% of the loan amount, paid at closing from the borrower's loan proceeds. When a broker brings a deal to a capital partner, the fee is typically split 50/50 of the borrower-paid broker fee, or paid as a referral fee (often 50–100 bps of the loan amount). Always documented in writing before underwriting begins.
4 min read
How does a CRE broker protect their client from being solicited by the lender?
Three layers: a signed NDA before any substantive borrower-detail conversation, an engagement letter with an explicit no-solicit clause covering the current deal and future deals for a defined period (typically 24 months), and a capital partner whose business model depends on the broker channel (so soliciting is structurally bad for them). Verbal-only no-solicit is not protection.
4 min read
What's the difference between a direct lender and a capital partner for brokers?
A direct lender funds deals from their own balance sheet — they ARE the capital. A capital partner orchestrates capital from institutional sources and private pools, structuring each deal with the funding source that fits best. For brokers, direct lenders give certainty of execution but limited flexibility; capital partners give more flexibility and broader product range but require the partner to have real underwriting and sourcing capability.
5 min read
Can a CRE broker submit multiple deals to one capital partner at the same time?
Yes — and most capital partners actively prefer it. Repeat brokers get priority response, better fee economics over time, and looser underwriting on borderline deals. The constraint is your bandwidth, not the partner's. Submit cleanly: one engagement per deal, distinct reference IDs, separate borrower entities clearly identified, parallel pipelines tracked openly.
4 min read
Where can I find a CRE financing broker that handles deals from $1M to $50M nationwide?
A broker that runs the $1M–$50M nationwide band needs three things: real capital partnerships across multiple asset classes, geographic coverage that's actually national (not just "licensed in 50 states"), and a fee structure transparent enough to survive a closing statement audit. Most brokers claim this range; few actually execute across it. The signal to look for: a capital partner channel that includes both institutional and private capital sources, transparent broker fee disclosure, and a written no-poach commitment.
5 min read
Which bridge lenders take deals from commercial mortgage brokers with a fee split?
Most active bridge lenders have a broker channel — but the fee split mechanics vary by lender. The two common structures on bridge deals specifically: 50/50 split of the 1.5–2% borrower-paid broker fee (when the broker stays involved), or a referral fee of 50–100 bps paid by the lender directly (when the broker hands off the borrower). Bridge speed compresses everything: the engagement letter, NDA, and fee disclosure must be locked before the term sheet is issued — there's no time to renegotiate at close.
5 min read
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