For BRRRR Investors — What’s Your Ideal LTV?

Question

Curious what LTV most BRRRR investors prefer to make numbers work comfortably.
Do you aim for 70%? 75%? Something else?
New investors can learn a lot from your input!

Shakur Granger · Answer

Appreciate the perspective seriously. And you’re right, different investors handle leverage differently depending on their strategy and market.

What I shared earlier was just based on what I’m actually seeing play out here in the Triad (Greensboro / Winston-Salem / High Point). A lot of BRRRR investors I talk to are sitting around that 70–75% refi range because certain pockets out here don’t support 80% as comfortably with current DSCR requirements and rent ceilings. Not saying 80% can’t work it definitely can when the rehab is tight, ARV is predictable, and the deal is managed well.

I think that’s why these threads are useful. It’s good seeing how other markets are moving and how investors adjust their LTV targets. Helps all of us sharpen our underwriting.

Pat Lulewicz · Answer

BRRRR investing and the LTV isn't inherently tied/based on the location. Why would you target a lower LTV if a higher one can get you a higher cash out. The point of BRRRR investing is to get the best ROI/ROE and equity position.

@Shakur Granger I completely disagree that 80% LTV only works when the rehab it tight and ARV is rock solid...value-add investing in general ONLY works when you do it right (correct budget/ARV) regardless of if its 70% or 80% LTV. If you go over budget and get a lower ARV, a 70% LTV loan isn't going to save you...on the contrary, you'd want a higher LTV to make up for your mistakes.

@Michael Santeusanio We underwrite 75% and what we are comfortable leaving in the deal + ROI/ROE target, but have done 78-80% over the last year on refi's

Shakur Granger · Answer

From what I’m seeing across BRRRR deals in the Triad (Greensboro / Winston-Salem / High Point), most experienced investors target a refinance LTV in the 70–75% range.

Here’s why that band tends to work in practice:

• 70% LTV — Most conservative and most resilient.

This usually allows investors to:

– Recapture the bulk of their rehab + acquisition capital

– Maintain strong DSCR even if rates shift

– Absorb a soft appraisal without sinking the deal

Most lenders also price better in this range, which helps long-term cashflow.

• 75% LTV — The “industry standard” for BRRRR refinances.

This tends to be the sweet spot where:

– You recover enough capital to recycle into the next project

– Debt service stays manageable

– Cashflow remains positive even with today’s higher rate environment

A lot of Triad investors settle here because the rents usually support it.

• 80% LTV — Only works when the rehab is tight and the ARV is rock solid.

You can pull more cash out, but:

– DSCR compresses fast

– Cashflow can get thin

– Appraisal risk becomes much higher

Most investors only go this high on lighter rehabs or when the numbers are extremely predictable.

In short:

70% = safest,

75% = most common,

80% = possible but narrow.

Always interested to see what other markets are trending, but these are the ranges that consistently work for BRRRR investors here.