Why We Fund Based on ARV
Traditionally, banks and other real estate financing institutions offer borrowers a loan-to-value (LTV) ratio: the amount of money you’re borrowing as a percentage of your home’s current value. For a purchase, LTV is based on the sales price of the home, unless the home appraises for less than its purchase price. When this happens, a property’s LTV is based on the lower appraised value, not the home’s purchase price.
For the borrower, this is hardly an ideal scenario, especially for buyers who intend to fix and flip a property or fix and hold it as an investment. That’s why Zeus CrowdFunding offers borrowers real estate loans based on a different figure: after-repair value (ARV).
Our reasoning is simple: If you were investing in a vintage Rolls Royce or a Rolex, you would consider what it’s worth fixed-up before making an offer. Why should real estate be any different? It shouldn’t. That’s why we provide the ARV figure, which measures the amount a property is expected to sell for after repairs or renovations. The ARV is set by a “subject-to” appraisal, and once complete, we will lend up to 80 percent of the ARV.
To meet the needs of real estate property investors, Zeus CrowdFunding lends based on the improved value or retail value of the property once it’s improved. While the appeal there is obvious to those looking to acquire funding for investment properties, it also can be used by would-be owner-occupants. We don’t discriminate!
Zeus isn’t the only lender to fund based on ARV, of course. Most others, however, will fund only 65–70 percent or a property’s after-repair value. We can do better! For repeat clients who qualify for our LoyaltyZ program—the real estate crowdfunding industry’s ONLY loyalty program—we offer funding at increasingly higher amounts of the ARV, all the way up to 80 percent!
The only way to earn those loyalty rewards is to get started. If you’re ready to borrow for your next real estate project, fill out our 3-minute pre-approval application now!