Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

Leverage and LTV

17 Sept 2022 · 0 min

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Loan-to-value measures how much you borrow against a property. Buy a $1 million property with $100,000 down and you have 90% LTV. Higher leverage lets you scale faster than other investors.

Loan-to-value, if you don't know, is looking at a leverage point, how much debt you have on an asset versus the price you're buying it for or the valuation that it actually has. So if you go buy $1 million worth of real estate, you put $100 grand down, you're putting 10% down, you got 90% debt, it's 90% loan-to-value. And when you want to scale quickly or quicker than others around you, you have to use more leverage.

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