These owners must transact.

Yo fellow young professionals, it's Chad here with some news about the current state of the commercial real estate market. It's not exactly a walk in the park out there, you know? Sellers don't want to sell their properties for pennies on the dollar, and buyers with cash are looking to make a killing. For brokers, it can be tough to find clients who actually need to make a deal. The market is in a state of "price discovery," which basically means everyone is trying to figure out what things are really worth. But, just like in the movie "The Shawshank Redemption," there's always hope.

One area where we can focus our efforts is on clients who took out bridge loans in the past 18 months. These clients need to secure new financing, but the reality is, their business plans probably don't work anymore. They're gonna have to make some tough choices, like cutting their losses and selling at a loss, or refinancing at a higher rate and saying goodbye to that cash flow they had planned on. Either way, they have to act, and that's where brokers come in. We can bring them options and help them make the best, most informed decision possible. We can be the light in the darkness. We have the information they need. It's not always a glamorous job, but it's where we add real value.

So, let's not get caught up in the doom and gloom of the market. Instead, let's focus on the opportunities that are out there and be the "Andy Dufresne" of the commercial real estate industry. Just like "The Shawshank Redemption" teaches us, "Hope is a good thing, maybe the best of things, and no good thing ever dies." And let's be real, if Andy Dufresne can tunnel out of Shawshank with nothing but a rock hammer, we can survive this market.

What is a bridge loan?

A bridge loan, also known as "interim financing," is a short-term loan often used to acquire and renovate a property before either selling it or securing permanent financing.

Think of it like "bridging" the gap between buying a property and getting it to a point where it's ready to be sold or financed long-term.

Here's how it works: let's say you find a property that's got great potential, but needs some TLC. You might not be able to secure a traditional loan to purchase it, because the property needs some work, or doesn't have the occupancy to qualify for permanent financing yet. But, you know you can renovate it, raise the rent, and increase the value of the property to the point where it will qualify for permanent financing.

That's where a bridge loan comes in. It allows you to acquire the property and have the cash on hand to make the necessary renovations. Once the renovations are complete, you can either sell the property for a profit or refinance it with a conventional long-term loan.

It's important to note that bridge loans typically come with higher interest rates and fees than traditional loans, but they can be a great option for investors who have a solid business plan and the ability to execute it quickly. Unfortunately, sometimes the market interrupts those plans and as they say in Silicon Valley you need to "Pivot."