LTV and hat it means to wholesalers

[Christopher Petrillo]

Hello BP, 

I am new to wholesaling and am trying to wholesale pre-forclosure homes. If a house I am looking at has a above a 100% LTV is that good or bad?

[Karen Rittenhouse]

@Christopher Petrillo I wholesale about a house every week and would never do a pre-foreclosure. I don't want to take the time or spend the extra money working with a bank. You need to be speaking directly with sellers if you want to buy properties at deep enough discount to be able to sell them to investors who can spend the money rehabbing and still sell at a profit for themselves.

And 100% loan-to-value means that the property is selling for what it's worth.

I prefer to be 65%-70% LTV after I've renovated. Meaning, I would buy a property worth $100,000 for $50,000 and spend $15,000-$20,000 renovating it. I would then have $65,000 to $70,000 of my own money in a property that is ready to sell on the retail market for $100,000.

I hope this helps and good luck to you!