Can someone please define loan to value vs. percent down as far as financing a deal is concerned. Often when I hear of LTV, I think of it as the amount loaned as a percentage of the appraised value, not the price paid for the property. If someone lends based on the percent of the paid price of the property, that would not take appraisal in consideration. Can someone help me out.

Are there entities that provide equity funds on apts. or office bldgs. where the 20 percent of the value of the deal is needed and the deal will still support DSCR requirements, have 9.5 cap rate, solid management in place, etc.?

Dareus:

A conservative lender will lend based on the lower of appraised or purchase value.

I know that every single one of my employers has had this rule.

About the equity funds question..... not sure what you mean, but there are lenders that will go higher than 80% ltv, but they are usually non-bank lenders.

On the equity funds question, it appears that apts. can be financed using a combination of debt/equity funds,but I do not know how. I am not sure if it is in the development stage where a lot of value can be added once the project is complete and tenants move in, or if debt/equity funds can be utilized for an apt. acquisition. I have of a partner coming in on the deal to supply the 20% equity, receive 6-8% annually on his money, and receiving 50% of the appreciation after 3-4 years with the partner who is on the note for 80% loan taking of the mgmt. co, etc. Does this sound realistic? This scenario would be for someone whose credit has been approved for the 80% amount, say8,000,000, but does not have the 20% equity, 2,000,000 of a 10,000,000 property.

For those that go above 80% they will generally go to 85% which is called the Mez Cap and the Investment Bank or Conduit has to be Mez Cap Cert, typically only provided on much larger deals by much larger financial institutions.

Also on a property of 8MM they should only really need to see somewhere between 850k and 1.5MM depending on the aggressiveness of the financial institution

Hope that little bit of info helped