Loan-to-Cost (LTC)
Quick Answer
See LTC — the ratio of the total loan amount to total project cost.
Definition
Loan-to-Cost (LTC) is another name for the LTC ratio — the total loan amount divided by the total project cost (purchase price plus renovation budget). See the LTC glossary entry for a full definition.
Why It Matters for Flippers
Identical to the LTC entry — LTC directly determines how much of your project cost the lender will fund.
Example in a Flip Deal
See LTC entry for a full example.
Related Terms
LTC (Loan-to-Cost)
The ratio of the total loan amount to the total project cost (purchase price + rehab budget).
LTV (Loan-to-Value)
The ratio of the loan amount to the appraised value of the property, expressed as a percentage.
ARV (After Repair Value)
The estimated market value of a property after all planned renovations are complete.
Fix and Flip Loan
A short-term real estate loan designed for investors who buy, renovate, and resell properties for profit.