Loan-To-Value (LTV) simply means the amount of the loan divided by the value of the property. Lower LTVs mean lower risk, as there is greater collateral value securing the loan. While many loans of the mid-2000s were often done at 100% LTV, CRB makes loans where the LTV at completion of any improvements will be no greater than 70%. Overall, we target a portfolio LTV of no more than 65%.
Long-term loans can be risky, as interest rates and market conditions can vary greatly over time.
At CRB, we focus on short-terms loans – typically between 6 and 18 months in duration.
We can underwrite loans to a specific set of market conditions and quickly adapt when things change.
CRB currently lends in the mid-Atlantic region, in Maryland, District of Columbia, and Virginia. We chose this market because of its attractive demographic factors, including strong employment, but also because of our experience and familiarity within these markets. With an office in Baltimore, we live and work in the markets in which we lend.
For each loan, we focus intently on how our funds will be repaid, even if the borrower defaults. This includes an analysis of the borrower’s experience and capacity to complete the project, the strength of the renovation or improvement plan, and overall market conditions. If we do not believe that CRB can take over a project and complete it successfully, we do not make the loan.