LTV tells you how much of the property's value the lender is willing to finance. 80% LTV means you put down 20%. Simple math.
But here's what most people miss: LTV is not just about your down payment today. It's about your margin for error tomorrow.
80% LTV
20% cushion. A 10% value drop? Still above water.
90% LTV
10% cushion. A 10% drop puts you underwater.
For Our 12-Unit Deal:
80% LTV = $960K loan. 75% LTV = $840K loan.
That extra $120K in cash you'd need to bring? That's not a penalty. That's your insurance policy.