Learn To Be A Fix and Flip Investor: Can You Calculate Your LTV? An Easy Guide to Real Estate Math

Tuesday, February 25, 2020

Can You Calculate Your LTV? An Easy Guide to Real Estate Math

Here’s how to do the math on your next hard money investment so you know if it’s going to be the right choice for you.

Is that home going to be a cash cow? Will that fix and flip line your pockets for your next project? You may not be a big fan of math, but you can’t be a great investor without knowing the basics to real estate calculations.

Let’s go over some of the big numbers you’ll need to know for an investment!

Loan Amount

This one is pretty easy to determine and the most important one to know. How much are you going to be able to put down on the home? That is going to feed into the next equation because to get an Arizona hard money loan the lender will look at the loan to value. Are you going to need higher than 70% LTV to make your deal work? It’s important to know this going forward because different lenders have different max LTVs that they’ll loan on.

LTV – Loan to Value

This calculation is pretty simple! You’re going to divide the amount you’re borrowing by the appraised value of the home. To get the appraised value it’s good to speak with someone keen to real estate if you aren’t familiar with home values in the area.

Here’s an example: If you’re investing in a home worth $100,000 and you’re going to borrow $90,000, you’ll have a LTV of 90%. Now just add the data for the home you’re interested in and see what your LTV is which is an important number to know when securing a hard money loan.

Hard money lenders like Level 4 Funding will often times go up to a 90% LTV, depending on the project. If you’ve got a proposal for an investment opportunity that you think is going to be a money maker, needs to happen quickly, or you’re worried about getting funded through a traditional lender, an Arizona hard money loan may be just what you need.

Call us today to schedule an appointment to present your proposal and get started on your next project in as little as a few days!

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
© 2019 Level 4 Funding LLC. All Rights Reserved.