Arizona Bridge Loans for Investors: How They Work in Phoenix and Beyond

An Arizona bridge loan is a short-term loan secured by investment property that covers the gap between buying a property and selling or refinancing it. Investors across Arizona use bridge loans to buy before a sale closes, stabilize a property, or free up equity. Lendoor, a nationwide direct lender based in Arizona, offers bridge loans to Phoenix and Arizona investors.

What is a bridge loan for real estate investors?

A bridge loan is a short-term, business-purpose loan that "bridges" you from one financing position to the next. You use it when a property isn't ready for a long-term loan yet, or when you need funds before a sale or refinance happens.

Bridge loans are secured by the property and sized on its value, the deal, and your exit plan. They usually cost more than long-term loans and are meant to be paid off within a short term. Lendoor's bridge term is typically 12 months, with leverage of up to 75%. See current details for Lendoor's bridge loan program.

When do Arizona investors use bridge loans?

Investors seeking bridge loans in Phoenix often use them to buy before long-term financing is ready. Common uses include:

• Buying before you sell. The next property comes along before your current one has sold.
• Light value-add. The property needs modest work or new tenants before it qualifies for a rental loan.
• Pulling equity from a property you own, when you need short-term cash for your next deal.
• Buying a property a bank won't finance yet, such as one that is vacant or not fully leased.
• Bridging to a DSCR refinance once rent is in place.

If the project is a full renovation, a fix and flip loan with a rehab budget may fit better. Read fix and flip loans for beginners. If you are building from the ground up, see our guide to new construction loans for investors.

How do bridge, fix and flip, and DSCR loans compare?

For a deeper look at the last two columns, read our comparison of bridge loans vs. DSCR loans. For how lenders measure leverage, see loan to value vs loan to cost.

How is a bridge loan sized?

Most bridge lenders size the loan on loan to value (LTV), meaning the loan divided by the property's current value or purchase price. Some also look at the expected value after light improvements. They then check your exit: how and when you will repay.

Hypothetical example (not Lendoor terms)

The numbers below are round and made up to show the math. The 70% leverage is hypothetical and is not Lendoor's bridge leverage.

If the plan is to lease the property and refinance into a DSCR loan, the lender will want to see that the expected rent can support the long-term payment. Interest, points, and closing costs are extra and not shown.

What do lenders look at on an Arizona bridge loan?

• The property's value and condition, confirmed by an appraisal.
• Your exit plan, whether that is a sale, a DSCR refinance, or another loan.
• Your credit and reserves. Lendoor's bridge FICO minimum is 640. Reserves are set case by case.
• Your experience with similar properties. Borrowers with 0-1 deals may be eligible, depending on the request, but should already have owned an investment property.
• Your entity. Lendoor lends only to LLCs and requires a personal guarantor.
• Title. Arizona real estate loans are commonly secured by a trust deed. Arizona Revised Statutes §33-801 defines trust deed terms, including the beneficiary and the trustee's power of sale (source). Read your loan documents carefully before you sign.

Bridge loans run from $150K to $5M, and rates vary by deal. All loans are subject to underwriting.

How do I choose a bridge lender in Phoenix?

Lendoor wrote this page, so we won't rank lenders. Instead, ask every lender the same questions and compare the written answers:

1. Who underwrites and funds the loan? A direct lender underwrites and funds its own loans.
2. Will the lender give maximum leverage in writing? Written numbers let you check your deal before you apply.
3. What is the full cost? Rate, points, fees, and extension terms.
4. What happens if your exit takes longer? Ask about extensions and their cost.
5. Is there a long-term option to refinance into? A lender with a DSCR program can cover the rental exit.
6. Does the lender cover your state and property type?

What is the exit from an Arizona bridge loan?

Most bridge loans end in one of two ways:

• Sale. You sell the property and repay the loan.
• Refinance. You lease the property and refinance into a long-term DSCR loan, which qualifies on rent instead of personal income. Lendoor offers DSCR loans for that exit. Our guide to DSCR loans in Texas explains how DSCR is calculated, and the same math applies in Arizona.

Investing in more than one state? See our overview of hard money lenders in Texas.

Does Lendoor lend in Arizona, and how do I apply?

Yes. Lendoor is an Arizona-registered direct lender that lends nationwide in 45 states, including Arizona. The excluded states are Nevada, Utah, North Dakota, South Dakota, and Alaska. Read more about Lendoor's team.

To apply:

1. Gather the property address, value or purchase price, and your exit plan.
2. Submit your bridge loan deal.
3. We review the deal and send terms. Timing depends on the deal and how fast documents come in.
4. Appraisal and underwriting confirm value and your exit.
5. Close, then sell or refinance at the end of the term.

Frequently asked questions

What is a bridge loan in Arizona?

It is a short-term, business-purpose loan secured by investment property that covers the gap between buying a property and selling or refinancing it.

Does Lendoor offer bridge loans in Phoenix?

Yes. Lendoor is an Arizona-registered direct lender that lends in 45 states. Phoenix-area investors may qualify for bridge loans, subject to underwriting.

How much can I borrow on an Arizona bridge loan?

At Lendoor, bridge loans go up to 75% leverage, depending on the property value and your exit. Get each lender's maximum leverage in writing before you apply.

What is the difference between a bridge loan and a fix and flip loan?

A bridge loan usually provides short-term financing on a property that needs little or no work. A fix and flip loan includes a rehab budget released in draws for a renovation.

What is the difference between a bridge loan and a DSCR loan?

A bridge loan is short-term gap financing. A DSCR loan is long-term rental financing that qualifies on the property's rent. Many investors use a bridge loan first, then refinance into a DSCR loan.

What is the exit on a bridge loan?

Most bridge loans are repaid by selling the property or refinancing into a long-term loan, such as a DSCR loan.

How do I compare bridge lenders in Phoenix?

Ask who underwrites and funds the loan, whether maximum leverage is published, the full cost including extensions, and whether the lender offers a long-term loan for your exit.

Have an Arizona deal to bridge?

Send us the property, the value, and your exit plan. Submit your deal and we'll review it and send terms.

About the author

Dana Lefkowitz is a Co-Founder of Lendoor. NMLS #1997062.

Lendoor, LLC, NMLS #2856707. This article is general information, not a loan offer or commitment, and not legal advice. All loans are subject to underwriting and approval. Terms vary by property and borrower.