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- November 3, 2026
- Insights
In a challenging market, you’ll hear a lot of people talk about the need to adjust their investment strategies. But what does that actually mean?
It can mean changing your acquisition criteria, adjusting your renovation plans, or reconsidering when to sell a property. It can also mean taking another look at assumptions you’ve made about financing.
That’s something we’re seeing at Encore Finance right now. Investors are reconsidering the traditional path from bridge financing to permanent debt, and in some cases making decisions that would have been unusual just a few years ago.
The Bridge-to-Bridge Trend
Historically, the progression was pretty straightforward. An investor would use bridge financing to acquire and stabilize a property, then refinance into long-term debt once the business plan was complete.
If someone came to us after 18 or 24 months in a bridge loan and wanted another bridge loan, that would naturally raise some questions. Why hadn’t they moved into permanent financing? Was the project behind schedule? Had something gone wrong?
That’s not always the case today. Sometimes it’s simple rate hesitancy. They’ve completed their business plans and their properties are performing, but they’re reluctant to lock in long-term financing at current interest rates.
Instead, some are choosing another bridge loan, hoping that rates will come down over the next 12 to 24 months and they’ll be able to secure better terms.
I understand the reasoning. If you think rates are going to decline, why commit to a five-year loan with a prepayment penalty today?
But it can be dangerous to fixate only on rates, and the right financing needs to take into account multiple factors. Here are some reasons why many investors are (wisely) still opting for long-term financing despite elevated rates.
Refinancing Risk
One of the first considerations is refinancing risk. When you take out another bridge loan, you’re committing to another refinancing event in the relatively near future. Even if rates come down, there’s no guarantee that property values, cash flow, or lending conditions will be where you need them when that loan matures.
Long-term financing, on the other hand, gives you more time before you have to revisit that decision.
There’s also the possibility that rates won’t come down as expected. They could stay elevated or move higher. Locking in a fixed rate today protects you against that uncertainty for the term of the loan.
Looking At the Whole Strategy
Every financing decision should take into account your entire portfolio and your overall strategy, not just the current project in question.
Let’s say you’ve stabilized a portfolio and you’re planning to acquire another 20 properties over the next two years. Do you want to be worrying about refinancing your existing portfolio in the middle of those acquisitions? Or would you rather have that financing in place so you can concentrate on the next opportunity?
For some investors, the stability of long-term financing is worth more than the potential gain from playing the interest rate guessing game.
Focusing On What You Know, Not What You Don’t
One thing I emphasize with our team at Encore Finance is that we’re not in the business of predicting interest rates for borrowers. Nobody knows for certain where rates will be in a year or two.
What we can do is ask the right questions. What’s the investor’s expectation for rates? What are their plans for the properties? What risks are they comfortable taking, and how does this financing decision affect the rest of their portfolio?
At Encore, we offer a range of financing solutions, including bridge and long-term portfolio loans. That gives us the flexibility to evaluate different structures based on each investor’s circumstances, rather than assuming there’s one path everyone should follow.
Adjusting your strategy to current market conditions can be a smart move. But the goal isn’t simply to get a better rate. It’s to put yourself in the best position to execute your business plan, whatever the market does next.
Have an Opportunity You’d Like to Talk Over?
One thing I emphasize with our team at Encore Finance is that we’re not in the business of predicting interest rates for borrowers. Nobody knows for certain where rates will be in a year or two.
There’s no one-size-fits-all answer to the question of when to move into long-term financing. If you’re weighing your options, let’s look at the bigger picture together and talk through the trade-offs before you make your next move. Shoot me an email at brad@encorefinance.com and we’ll discuss what makes most sense for you.
