Hey Reader!

Have you ever heard investors talk about LTV and felt confused?

This is one of the most important numbers when buying notes, and today’s newsletter breaks down exactly what it is and why it matters.

Notes Concept🧠

Loan-to-Value (LTV) is a percentage that compares the loan amount to how much the property is worth. Here is the formula.

A lower LTV indicates lower risk. I usually underwrite my deals with 70% or less Loan to Value.

So if the borrower stops paying and I have to foreclose on the property, I’ll have at least 30% equity cushion protecting the investment. That buffer helps cover potential legal costs, market fluctuations, repair expenses, or any discount needed to resell the property quickly.

A conservative LTV gives me room to absorb unexpected issues while still preserving the principal.

Real World Experience💰

One of my borrowers had two choices: keep renting, or try to own a home of her own.

If she chose to rent, she’d be paying someone else’s mortgage forever and building nothing for herself.

Instead, she bought a home with a note I created for her and today she has about $200,000 in equity in that property.

Her LTV is under 30%, which means the amount borrowed is much less than the property is worth.

She could sell it tomorrow and walk away with life changing money.

This is the part of this business people don’t talk about enough. Yes, I am building cashflow for myself and my investors with notes.

But I am also helping people who got turned down by every bank in town, get into home ownership. Win-win is not just a phrase.

It is how I think through every deal.

Mindset Shift 🔄

Putting money in a savings account feels secure. But with interest rates barely outpacing inflation, your money is essentially parked and not working for you. It's actually losing value. Buying performing notes flips the script.

• Average savings account: 1–3% annual return
• Inflation: 3–5% annually
• Notes: 10-14% annual return

With notes you’re deploying your money to work harder than any bank account ever could.

Stop relying on banks to protect your money and start using proven strategies to accelerate financial freedom.

If you missed the webinar on how to make work optional using real estate notes, catch the replay below!

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To your success,

Sierra Davis

Do you know how far away you are from reaching retirement or your other financial goals? The Instant Wealth Assessment can successfully pinpoint if you're on track or how much you need to make up the difference. - Take the Assessment ​

This email is for educational and informational purposes only. Nothing contained here constitutes financial, legal, investment, or tax advice. All investing involves risk, including the possible loss of principal. Individual results will vary. Please consult a licensed financial advisor, attorney, or tax professional before making any investment decisions. Some links in this email may be affiliate links. If you sign up through my link, I may receive a commission at no additional cost to you.