Loan-to-Value (LTV)
Quick Answer
See LTV — the ratio of the loan amount to property value (typically ARV for flip loans).
Definition
Loan-to-Value (LTV) is another name for the LTV ratio — the total loan amount divided by the property's appraised value (ARV for fix-and-flip loans). See the LTV glossary entry for a full definition.
Why It Matters for Flippers
Identical to the LTV entry — LTV limits total loan exposure relative to what the property will be worth at completion.
Example in a Flip Deal
See LTV entry for a full example.
Related Terms
LTV (Loan-to-Value)
The ratio of the loan amount to the appraised value of the property, expressed as a percentage.
LTC (Loan-to-Cost)
The ratio of the total loan amount to the total project cost (purchase price + rehab budget).
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.