Understanding Loan to Cost in the real estate industry

RENTAL REVIEW • July 3, 2023

Understanding Loan to Cost in the Real Estate Industry

Loan to cost (LTC) is a measure of how much debt a lender is willing to provide for a real estate project. LTC is an important factor for investors to consider when evaluating financing for a real estate investment. Several factors can affect LTC in real estate, including the type of property, the location of the property, and the lender’s risk appetite. In general, lenders are more willing to provide loans with a lower LTC ratio because it limits the lender’s risk while ensuring that the investor still has skin in the game.

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Lima One Capital, LLC / Lima One Capital, LLC is not currently licensed in Alaska, North Dakota, South Dakota, or Vermont. Lima One Capital, LLC is licensed or exempt from licensing in all other states / NMLS ID #1324403 (www.nmlsconsumeraccess.org) / 201 E. McBee Ave. Suite 300. Greenville, SC 29601/ (800) 390-4212 / Arizona Mortgage Banker License #0949706 / Florida Mortgage Servicer License # MLD1662 / Idaho Mortgage Broker/Lender License # MBL-2081324403/ Minnesota Residential Mortgage Originator License # MN-MO-1324403/ Nevada Mortgage Company License #5304/ Oregon Mortgage Lender License # ML-5397/ Utah-DRE Mortgage Entity License # 11755492 / Licensed as a California Finance Lender under the Department of Business Oversight License #60DBO-45834.

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