Who offers a Loan based on the After Repair Value (ARV), of a Fix and Flip?

[Ethan Gidcumb]

Hi!

One thing I run into often are borrowers who are looking for loans based purely on the After Repair Value of a Fix and Flip investment. Because of common marketing strategies by the industry, their expectation is that a lender will provide a loan at 70%-80% of the value of the asset after its been repaired, upfront. In my experience Loan to After Repair Value (LTARV) is most commonly used as an Underwriting metric to ensure "the juice is worth the squeeze", or in other words, to make sure the project is worth the investment. I find that it's very rare that a lender will actually close at this amount of leverage because they would typically be putting up a much larger amount of funds than the property would be worth at the time.

Has anybody actually worked with a lender that did fund based off of the LTARV? What were their terms?

Thank you,