What is loan-to-value (LTV), and why does it matter on your deal?

LTV is the number a lender looks at first. Here's how it works.

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The formula.

Loan amount divided by property value equals LTV.

Example: a $400,000 property with a $200,000 loan is 50% LTV. The loan is half the value.

A lower LTV leaves more equity behind the loan, which makes a lender more comfortable. A higher LTV means you're borrowing more of the value.

Value: what the property is worth now, its condition, and how marketable it is. For a flip, lenders also look at the after-repair value (ARV).
Your exit: the loan still needs a clear payoff plan, like a sale or refinance.

What LTV can I get?

It depends on the deal, the property, and the lender. Call me with the numbers.

What's ARV?

After-repair value: what the property should be worth once the work is done.

Call me with the address, the value, and the loan amount you want. I answer my own phone.

What to have in front of you

Not all of it? Call anyway. I will tell you what I need. I only do investment property.