How to Use These Case Studies
Each case study walks through the investment scenario, the financing structure used, the financial results, and the key lessons for investors. These are educational examples designed to illustrate how common real estate investment strategies work in practice. Actual results vary significantly based on market conditions, property condition, lender terms, and investor expertise.
Case Study 1: BRRRR in the Midwest — Detroit Duplex
Strategy: Buy, Rehab, Rent, Refinance, Repeat (BRRRR)
Property: Duplex in Detroit suburb | Purchase Price: $85,000 | Rehab Budget: $45,000 | Total Invested: $130,000
Financing Used: Hard money loan at 11% for 12 months ($80,000 loan, $50,000 investor cash down)
Post-Rehab Appraised Value: $185,000 | Monthly Rent: $2,400 ($1,200/unit)
Refinance: DSCR cash-out refinance at 75% LTV = $138,750 loan at 8.25% | Monthly PITIA = $1,150 | Net cash flow = $1,250/month
Capital Recovery: $138,750 cash-out proceeds minus $80,000 hard money payoff = $58,750 returned to investor (of $50,000 invested cash plus points and interest). Investor effectively acquired a cash-flowing property for near-zero net cost.
Key Lessons: Accurate ARV estimation is critical — over-estimating the after-repair value will undermine the refinance. Renovation cost control is equally important. This deal worked because the purchase price created sufficient spread between cost and ARV.
Case Study 2: Fix-and-Flip — Single Family Suburban Home
Strategy: Fix-and-flip (short-term renovation and resale)
Property: 3BR/2BA suburban home | Purchase Price: $180,000 | Rehab: $55,000 (kitchen, baths, flooring, paint, roof) | Holding Period: 7 months
Financing: Hard money loan at 12%, 90% LTV on purchase ($162,000 loan), renovation draw facility. Interest: ~$11,340 for 7 months. Origination: 2 points = $3,240. Closing costs (buy/sell): ~$15,000 combined.
Sale Price: $295,000 | Gross Profit: $60,000 | Net Profit After All Costs: ~$30,420 | ROI: Approximately 163% annualized on invested capital
Key Lessons: Hard money carrying costs are substantial — deal timeline management is critical. This project ran on schedule, which is the exception. Renovation overruns or extended holding periods erode margins quickly. Always build a 15-20% contingency into your rehab budget.
Case Study 3: DSCR Long-Term Rental — Sun Belt Quadplex
Strategy: Buy-and-hold rental with DSCR financing
Property: 4-unit property in growing Sun Belt metro | Purchase Price: $320,000 | Down Payment: 25% = $80,000
Financing: DSCR loan at 8.75%, 30-year amortization | Loan amount: $240,000 | Monthly PITIA: $2,180
Gross Monthly Rent: $3,600 ($900/unit) | DSCR: 3,600 ÷ 2,180 = 1.65 (strong)
Net Cash Flow: After 10% vacancy, 10% management, taxes, insurance, and maintenance reserves: ~$620/month | Cash-on-Cash Return: ~9.3% on $80,000 invested
Held in LLC: Yes — DSCR lender allowed LLC ownership, providing liability protection. | Key Lessons: DSCR loans enabled qualification without personal income documentation, which was essential for this self-employed investor. The slightly higher rate (vs conventional) was justified by the qualification flexibility and LLC holding structure.
Case Study 4: Small Commercial — Owner-Occupied Office Building via SBA 504
Strategy: Owner-occupied commercial acquisition via SBA 504 loan
Property: 4,000 SF office building | Purchase Price: $850,000 | Previous Monthly Rent: $7,200/month
SBA 504 Structure: Conventional lender: $425,000 (50%) | SBA CDC: $340,000 (40%) at fixed rate 6.8% for 25 years | Borrower equity: $85,000 (10%)
Monthly Payment (SBA portion): $2,340 | Monthly Payment (conventional): $2,890 | Total Monthly: ~$5,230 vs $7,200 rent = $1,970/month savings while building equity
Key Lessons: SBA 504 financing transformed this business from a perpetual renter into an equity-building owner. The 10% down requirement (versus 25-35% conventional commercial) made the acquisition accessible. The fixed-rate SBA portion provided long-term payment predictability. The business now benefits from both occupancy stability and real estate appreciation.