When investors work with private lenders for real estate USA, property value is one of the factors that can influence how a financing request is structured. A lender may consider the property’s purchase price, current value, projected value, and the amount required for renovation or construction. These details help establish the relationship between the requested loan and the underlying investment. Because private financing is generally asset-based, understanding the property’s financial position is an important part of preparing a loan request.
Loan-to-value, commonly referred to as LTV, compares the loan amount with the property’s value. For example, if a property is valued at $500,000 and the proposed loan is $350,000, the LTV is 70%. Loan-to-cost, or LTC, approaches the transaction differently by comparing the loan amount with the total project cost. This distinction can be particularly relevant for renovation and construction projects where the purchase price is only one part of the overall investment.
A lender may also consider the property’s condition, location and market, property type, income or performance, and the structure of the transaction when reviewing the financing request. For a renovation project, the anticipated improvement costs and expected finished value may form part of the analysis. Investors looking for hard money lenders for real estate may find these considerations especially relevant because hard money financing is generally designed around shorter-term acquisitions and renovation opportunities.
Private financing is therefore not simply a calculation based on one number. The lender reviews the property and the complete deal to determine an appropriate structure. InstaLend offers several asset-based financing options, including fix and flip, SFR, new construction, multifamily bridge, and multifamily term loans. The company states that it can provide a same-day commitment after receiving deal details, while its typical closing timeframe is 7–14 business days once the appraisal is complete. This approach allows investors to structure financing around the specific property and investment strategy.