When real estate values are climbing and the economy is doing well, everyone wants a good investment. The truth is, not every real estate investment is good. You have to learn to tell the good ones from the bad ones.
There are many factors that affect real estate investment risk and loan to value (LTV) is just one of them, but it’s a very important one. If you take out too much loan relative to the risk, not only will you not see as large a return on your investment as you might have, but you may end up losing your entire investment.