What does LTARV and ARLTV mean?

LTARV means Loan To After Repair Value. This acronym is commonly used by private lenders and commercial lenders who finance fix and flip and rental property investors.

What does ARLTV mean?

ARLTV stands for After Repair Loan To Value, and it is the same exact concept as LTARV. Some private lenders use ARLTV, others use LTARV in their communications.

What is the maximum LTARV?

Private lenders generally limit the loan to after repair value to 75%. That means a property that appraises for an after repair value of $100,000 based on scope of work, would qualify for a loan of $75,000.

Let's drive the concept home with an example: you want to buy a distressed property for $100,000. You expect to invest another $100,000 in repairs. Given your planned scope of work for the rehab, you expect the property to appraise for $300,000 based on recent comps.

Before providing funding, your private lender orders an appraisal. The appraiser inspects the property, reviews your scope of work, and provides an opinion of After Repair Value in the appraisal report of $295,000. Close to your estimate!

So you have:

• Purchase Price: $100,000
• Rehab Budget: $100,000
• ARV: $295,000

Now, here are the terms you can get from your private lender:

• Maximum Loan Amount: $221,250 ($295,000 * 75%)
• Up to 90% of Purchase Price: $90,000
• Up to 100% of Rehab Budget: $100,000
• Total loan: $190,000
• Term: up to 18 months
• Interest Rate: see Bridge Loan Index
• Origination Fees "points": see Bridge Loan Index

Bridge Loan Exit Strategy

After your project is complete you can either sell the property ("flip"), or you can rent and refinance the property ("BRRR").

Learn more about ARV in our real estate glossary.

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