Are you ready to master the essential metrics for successful fix and flip investments? In the latest episode of The Hard Money Podcast, I sit down with Justin Hubbert to break down the key fix and flip calculations every investor needs to know: Loan-to-Value (LTV), Loan-to-Cost (LTC), and After-Repair Value (ARV). If you're serious about flipping properties, understanding these metrics can be the difference between profit and loss.
What Are Fix and Flip Calculations?
When evaluating a property for a fix and flip loan, lenders consider specific metrics to determine how much financing can be offered and whether the deal is viable.
Loan-to-Value (LTV)
LTV represents the ratio of the loan amount to the property's current market value. A lower LTV reduces the lender's risk and ensures the borrower has equity in the deal.
Loan-to-Cost (LTC)
LTC measures the loan amount as a percentage of the total cost of the project, including purchase price and renovation costs. This metric ensures the borrower has sufficient skin in the game and that the loan aligns with the project's budget.
After-Repair Value (ARV)
ARV is the estimated market value of the property after renovations. Lenders use ARV to assess the maximum potential loan amount and to ensure the project is profitable.
Understanding these metrics helps investors structure deals effectively, minimizing risks and maximizing returns.
Why Watch the Video Above?
In the episode, Justin and I not only explain these metrics but also provide real-world examples of how they're used to evaluate fix and flip projects. Whether you're a seasoned investor or just starting, this discussion offers actionable insights to help you make smarter decisions.
To make it even better, we’re offering a Fix and Flip Calculator that you can access by filling out the form below. This tool will streamline your calculations, giving you the confidence to analyze deals quickly and accurately.
Ready to take your fix and flip game to the next level? Watch the full video above and don’t forget to grab your free Fix and Flip Calculator by completing the form below.
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