3 ACRONYMS THAT A REAL ESTATE INVESTOR SHOULD KNOW

Every industry has a lingo. Every profession has a different language that they speak, most of which is done through acronyms. The same goes for a real estate investor. Real estate investors use acronyms all of the time to communicate faster and more efficiently.

Today’s post is going to cover three different acronyms that every real estate investor should know.

HML

An HML is a Hard Money Lender. Hard money lenders offer specialized loans that are based off of the value of the house you’re trying to buy. These loans cover a short time span, normally 6-12 months. If you are just getting started in the flipping business HMLs will probably be your go to source for funding.

Just remember that you’ll probably have to put your house up for collateral to get approved for your first load. However, if you build a great working relationship with your hard money lenders, together you can make a lot of money flipping houses.

You can click here to get a list of hard money lenders who operate all across the country!

LTV

LTV means Loan To Value. For a real estate investor, this acronym is normally associated with hard money lenders. To get an idea of what this means lets look at an example.

If I want to buy a house for $100, 000 dollars and I go to a hard money lender that provides a 65% LTV, I am going to get $65,000 from that lender. The amount of the loan is normally based on the equity of the home. Lenders like to see low LTV because it means there is more equity in the house.

Banks typically offer a 97%-100% LTV on their loans, but are harder to get approved for if you are just starting out as a real estate investor.

ARV

The last acronym we’ll cover today is ARV. ARV is short for After Repair Value. Your ARV is a big part of turning a profit as a real estate investor. This is the baseline for how you make offers. ARV is the value of the house after giving it the correct updates and accessories. It is the maximum realistic price that you can sell a house for.

The most accurate way to get an ARV is through using MLS. Realtors have the best access to listings that have sold, days on market and price drops through MLS. If you don’t currently have a realtor or access to MLS you need to get to work! It could be the difference between making or losing thousands of dollars in profit!

Again, every industry has its own language. These are just three acronyms that a real estate investor needs to know. There are tons more! Check out the glossary on my resources page to brush up on the real estate investor lingo!