How Does the Refinance Math Work After a Multifamily Bridge Loan?

The refinance stage is where the value created during the bridge period is tested. In the example, the investor starts with a $2,000,000 purchase and $400,000 renovation budget, creating a $2,400,000 project cost. The bridge loan at up to 80% LTC is $1,920,000. After the renovation, the projected NOI increases from $120,000 to $195,000, and an illustrative 6.5% cap rate produces an estimated stabilized value of approximately $3,000,000. This is the basic progression investors need to understand when evaluating multifamily bridge loans.

The investor does not automatically receive the difference between the new value and the original loan balance. Instead, the permanent lender determines its own refinance amount based on factors such as stabilized value, loan-to-value, NOI, and debt service coverage requirements. The blog uses general thresholds of roughly 85–90% or higher occupancy and a 1.25x or higher DSCR as examples of what permanent lenders may look for. These are not InstaLend refinance terms; the permanent lender determines those requirements.

An apartment bridge loan is therefore only one part of the complete financing strategy. If the stabilized property supports enough permanent debt to repay the $1,920,000 bridge balance and applicable closing costs, the investor may have cash left over. If the refinance does not produce enough proceeds, additional cash may be required. These short term multifamily loans work best when the investor calculates the expected exit before taking on the bridge debt.

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