Updated about 9 hours ago on . Most recent reply
What LTV do you actually sleep well at night with?
Simple question, but I think the answers will vary a lot based on experience and cash flow situation.
On a single-family rental with a DSCR loan, what LTV percentage do you personally consider “low risk”? Not zero risk, because leverage always carries some, but the point where you feel genuinely comfortable.
75% LTV is the standard, and it works for a lot of people. But at 65% or even 50%, your cushion on DSCR tightens less quickly if rents soften or rates adjust. Drop down to 40% and you’ve got real flexibility, though obviously your capital efficiency takes a hit.
Everyone’s threshold is different depending on reserves, cash flow, market, and how many deals you’ve been through. I’m curious where yours lands.
Mine is 60% as it allows for good cash flow, reserve buildup and always feel I would be in control as if it got hairy could sell as well and not have to worry about covering the bank debt.
Drop your number below and, if you want, tell us why. Would love to see where the community actually sits on this.
- Chris Seveney
