Description

In today's video, we're going to be talking about loan to value vs. loan to cost. When a sponsor goes out and buys a piece of real estate, they will be financing it with two key components of capital. One is going to be debt that they get from the bank, and the other is going to be equity which they'll be getting from you. The debt placed on the property is never going to be 100% of what the sponsor needs. If it were, they wouldn't need your equity. The way that the banks determine how much they're going to lend to a sponsor is by using one of two ratios: loan to cost and loan to value. For the ultimate guide to real estate crowdfunding and syndication, subscribe now to the FREE GowerCrowd newsletter: https://bit.ly/3jRnlTv | Visit the GowerCrowd website, the most complete source of free real estate syndication and investing resources and training available anywhere: https://bit.ly/2VMA7ea | Are you a real estate developer? Read the new book, SYNDICATE and learn how to find more investors so you can raise more money: https://bit.ly/3jRUM8r | Are you a real estate investor? Watch this free webcast and discover the Hidden Secrets to Success in Real Estate Investing: https://bit.ly/2VJMcAN