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Forums » Seeking Financing, Money, or Loans » Newbie looking for info

Newbie looking for info Subscribe to Newbie looking for info

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Robert Greathouse


Forum_avatar_avatar-rbrt67

Jan 17 '11, 06:40 PM

I am trying to understand the LTV %. My question is.. If a lender will go to 65% LTV and I want to finance a apartment building, do they calculate this on the purchase price of the building or on the value using the NOI formula they suggest?? Example: Using the lenders formula, I come to a value of around $800,000. I can aquire the building for around $500,000. They will loan up to 65% LTV. Does that equal 65% of $800,000 or 65% of $500,000? Thanks for any info.


Anthony Larson

Real Estate Investor · Las Vegas, Nevada


Forum_avatar_avatar-tonyrei

Jan 17 '11, 07:27 PM

I was told purchase price by the lender I spoker to, otherwise you would be able to buy some great deals with no skin in the game.


Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado


Forum_avatar_avatar-wheatie

Moderator Pro

Jan 17 '11, 10:45 PM

Purchase price or an appraised value, whichever is less. The appraisal will never be as simple as your example.

Small_flying-phoenixJon Holdman, Flying Phoenix LLC


Robert Greathouse


Forum_avatar_avatar-rbrt67

Jan 18 '11, 06:50 AM

thanks for the info, guys. I figured that, but I wanted to make sure.

Jon, the HML I have been looking at says they don;t look at the appraised value from an appraiser. They use a formula based on the actual NOI and a specified CAP rate to get a value. Does this seem right??




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