MODULE 9 • WEEK 36 • LESSON 143

Case Study Analysis

Apply your comprehensive knowledge to complex real-world scenarios through detailed case study analysis that demonstrates professional decision-making and problem-solving abilities

⏱️ 120 min 📋 4 case studies ❓ 40 questions 🎯 90% required

Module 9

Week 36

Lesson 143

Final Assessment

🚨 Professional Certification Assessment

⚠️

One Attempt Only: This assessment cannot be retaken. Review all materials before beginning.

⏱️

120 Minute Limit: Complete all 4 case studies within the time limit. Progress auto-saves.

📊

90% Required: Score 36/40 or higher to qualify for professional certification.

🏆

Industry Recognition: Passing score demonstrates professional competency for employment and lending.

📋 Case Study Assessment Structure

Case Study 1: Mixed-Use Development

Modules Tested: 1-3 (Fundamentals, Construction, Development)

Scenario: $30.8M downtown redevelopment project

Questions: 10 (Site analysis, zoning, construction, feasibility)

Case Study 2: Construction Financing

Module Tested: 4 (Construction Finance)

Scenario: $750K custom home financing optimization

Questions: 10 (Loan analysis, cash flow, risk assessment)

Case Study 3: Investment Property

Modules Tested: 5-7 (Buying, Financing, Transactions)

Scenario: $3.2M apartment complex acquisition

Questions: 10 (Valuation, due diligence, negotiation)

Case Study 4: Portfolio Strategy

Modules Tested: 8-9 (Investment Analysis, Advanced Strategies)

Scenario: $8.5M portfolio diversification strategy

Questions: 10 (Portfolio theory, risk management, optimization)

✅ Ready to Begin Professional Assessment?

I have reviewed all 9 modules and feel confident in my knowledge I have 2+ hours available without interruptions I understand this is my only attempt at professional certification I have a calculator ready for financial calculations I’m prepared to demonstrate professional-level real estate competency

Case Study 1 of 4 Question 1 of 10 Overall: 1/40

Time Remaining: 120:00

📊 Case Study 1: Downtown Mixed-Use Development

Modules Tested: Real Estate Fundamentals, Construction Management, Development Planning

🏙️ Development Opportunity: The Metropolitan District Project

Project Overview:

Location: Downtown Charlotte, NC – Transit-oriented development zone
Site Size: 2.5 acres (108,900 SF)
Current Zoning: TOD-M (Transit-Oriented Development – Mixed Use)
Acquisition Cost: $2,800,000 ($25.70/SF)
Current Use: Vacant lot with demolished building foundation

Proposed Development:

Residential: 180 apartment units (mix of studio, 1BR, 2BR)
Commercial: 15,000 SF ground-floor retail space
Parking: 220 spaces (underground + surface)
Building Height: 8 stories (within zoning limits)
Total Building Area: 195,000 SF

Construction & Development Costs:

Hard Costs: $28,500,000 ($146/SF average)
Soft Costs: $4,200,000 (permits, professional fees, marketing)
Contingency: $1,600,000 (5% of hard costs)
Interest During Construction: $2,100,000 (18-month timeline)
Total Development Cost: $39,200,000

Market Analysis Data:

Apartment Rents: Studio $1,400/mo, 1BR $1,650/mo, 2BR $2,200/mo
Retail Rents: $28/SF/year NNN
Absorption Rate: 12 units/month (comparable projects)
Vacancy Rates: 4% apartment, 8% retail (stabilized)
Market Cap Rates: 6.5% (apartments), 7.2% (retail)

Regulatory Requirements:

Zoning Compliance: Requires Design Review Board approval
Parking Ratio: 1.2 spaces per unit required
Affordable Housing: 10% units at 80% AMI or $180K in-lieu fee
Environmental: Phase I shows minor soil contamination – $85K remediation
Traffic Impact: City requires $120K traffic signal upgrade

Key Risk Factors Identified:

Construction Costs: Material inflation risk over 18-month build
Interest Rates: Fed rate uncertainty affecting financing costs
Market Demand: New competing projects within 1 mile
Regulatory: Potential changes to TOD requirements
Environmental: Unknown contamination discovery risk

Question 1 of 10:

Given the site’s transit-oriented development zoning and downtown location, what is the PRIMARY advantage for this mixed-use project?

Lower construction costs due to urban incentives Reduced parking requirements and higher density allowances Guaranteed tax abatements for mixed-use developments Exemption from environmental assessment requirements

Question 2 of 10:

The environmental assessment shows minor soil contamination requiring $85K remediation, and the city requires a $120K traffic impact fee. What should be the developer’s PRIMARY concern?

The total additional costs exceed the 5% contingency budget Environmental liability could extend beyond the remediation cost estimate Traffic fees indicate insufficient infrastructure capacity for the project Combined costs make the project financially unfeasible

Question 3 of 10:

With 180 units requiring 1.2 parking spaces each (216 required) but only 220 planned, what is the BEST strategy?

Request a parking variance based on transit-oriented location Reduce the unit count to 183 to meet parking requirements exactly Pay in-lieu fees for the 4 missing spaces The current plan already meets requirements with 4 spaces buffer

Question 4 of 10:

For the 18-month construction timeline, what should be the MOST critical scheduling consideration?

Starting construction during optimal weather months Coordinating retail buildout with apartment completion for faster lease-up Sequencing to minimize interest carry costs on construction loan Timing certificate of occupancy with peak rental season

Question 5 of 10:

The affordable housing requirement offers 10% units at 80% AMI or $180K in-lieu fee. Which option provides better financial outcome?

Always choose in-lieu fee to maximize rental income Provide affordable units to maintain community goodwill Calculate NPV of reduced rents vs. upfront fee payment Split between 5% affordable units and $90K fee

Question 6 of 10:

Given construction costs of $146/SF average, what does this indicate about the project?

Costs are below market for mixed-use construction Underground parking significantly increases per-SF costs Costs are typical for mid-rise urban construction Budget is insufficient for quality construction

Question 7 of 10:

The 12 units/month absorption rate suggests what about market timing?

Project will achieve full occupancy in 15 months Absorption rate is too slow for project viability Rate should be discounted by 20% for conservative planning Retail space will lease faster than residential

Question 8 of 10:

With material inflation risk over 18 months, what is the BEST risk mitigation strategy?

Lock in material prices with suppliers at contract signing Increase contingency from 5% to 10% to cover escalation Negotiate guaranteed maximum price (GMP) contract with general contractor Start construction immediately to avoid price increases

Question 9 of 10:

Based on the total development cost of $39.2M and proposed unit mix, what should be the minimum sales price to achieve a 20% developer profit?

$43.5M $47.0M $51.2M $55.8M

Question 10 of 10:

Considering all factors presented, what is the overall project recommendation?

Proceed immediately – strong market fundamentals support development Proceed with modifications – reduce scope to manage risk Delay 12 months – wait for better market conditions Do not proceed – risks outweigh potential returns

💰 Case Study 2: Construction Financing Optimization

Module Tested: Construction Finance and Loan Analysis

🏠 Project: Luxury Custom Home Construction Financing

Construction Project Details:

Project Type: Owner-occupied luxury custom home
Location: Suburban Austin, Texas
Home Size: 4,200 SF, 5BR/4BA on 1.2 acre lot
Land Value: $150,000 (owned free and clear)
Construction Cost: $520,000 (high-end finishes)
Soft Costs: $45,000 (architect, permits, engineering)
Construction Timeline: 14 months

Borrower Financial Profile:

Household Income: $185,000/year (stable employment)
Credit Score: 780 (excellent credit history)
Debt-to-Income: 22% (including proposed construction loan)
Liquid Assets: $280,000 (available for project)
Experience: First-time custom home builder
Current Housing: Rental ($2,800/month)

Three Financing Options:

Option A: Regional Bank

Product: Construction-to-Permanent loan
Interest Rate: 8.25% (Prime + 1.0%)
LTC Ratio: 80% maximum
Origination Fee: 1.25%
Other Fees: $3,500 (appraisal, survey, legal)
Conversion: Automatic to 30-year fixed at market rate
Draw Schedule: 6 scheduled draws
Special Features: Rate lock on permanent conversion

Option B: Local Credit Union

Product: Construction-only loan
Interest Rate: 7.75% (Prime + 0.5%)
LTC Ratio: 75% maximum
Origination Fee: 1.0%
Other Fees: $2,200 (lower cost structure)
Conversion: Separate permanent loan required
Draw Schedule: 8 scheduled draws (more flexible)
Special Features: Member rates, local service

Option C: National Construction Lender

Product: Construction-to-Permanent loan
Interest Rate: 8.50% (Prime + 1.25%)
LTC Ratio: 85% maximum
Origination Fee: 1.5%
Other Fees: $4,200 (comprehensive services)
Conversion: Automatic conversion, multiple term options
Draw Schedule: Online platform, faster processing
Special Features: Technology platform, builder network

Current Market Environment:

Prime Rate: 7.25% (recent increase from Fed policy)
Construction Costs: Stable with 3-4% annual inflation expected
Permanent Rates: 30-year fixed averaging 7.8% – 8.2%
Local Market: Strong demand, 8-month average construction timeline
Rate Outlook: Fed may raise rates 0.5% more in next 12 months

Question 11 of 40:

Calculate the total project cost including land. Which LTC option provides the highest loan amount?

Option A: $572,000 Option B: $536,250 Option C: $607,750 All options provide the same loan amount

Question 12 of 40:

What is the required cash investment (down payment + fees) for Option A?

$143,000 $150,650 $156,400 $162,850

Question 13 of 40:

Which factor should be the PRIMARY consideration for this owner-occupied construction project?

Lowest interest rate regardless of other terms Highest LTC ratio to minimize cash requirement Lowest total cost of funds over the construction period Best customer service and local market knowledge

Question 14 of 40:

Given the Fed rate outlook of potential 0.5% increase, what is the best interest rate risk strategy?

Choose Option B for lowest current rate Lock permanent rate now with construction-to-perm loan Wait for rates to peak before starting construction Use construction-only loan and refinance later

Question 15 of 40:

Calculate the peak monthly interest payment for Option A (assuming 80% of funds drawn):

$3,127 $3,435 $3,720 $4,015

Question 16 of 40:

The borrower’s debt-to-income ratio of 22% including the construction loan indicates:

Strong qualification for all loan options Marginal qualification requiring compensating factors Need for co-signer or additional income documentation Disqualification from conventional construction lending

Question 17 of 40:

What advantage does Option B (Credit Union) provide despite lower LTC?

Lowest total interest cost during construction Flexibility to shop for best permanent rate later More frequent draws reduce interest carry All of the above

Question 18 of 40:

For a first-time builder, which lender feature should be prioritized?

Lowest rates and fees Highest LTC ratio Experience with owner-builders and guidance support Fastest closing timeline

Question 19 of 40:

With $280,000 available liquid assets, what is the optimal cash reserve strategy?

Use minimum required and invest remainder Put down 25% to minimize loan amount Keep 20% reserve for construction overruns Use maximum down payment to reduce interest costs

Question 20 of 40:

Based on all factors analyzed, which financing option provides the BEST overall value?

Option A – Balance of rate, features, and conversion benefits Option B – Lowest cost during construction phase Option C – Highest leverage and technology platform Options are equivalent; choose based on personal preference

🏢 Case Study 3: Investment Property Acquisition

Modules Tested: Property Analysis, Financing Strategies, Transaction Management

🏠 Investment Opportunity: Garden Grove Apartments

Property Details:

Property: Garden Grove Apartments – 24 units
Location: Phoenix, Arizona (emerging submarket)
Building: Built 1985, renovated 2015
Unit Mix: 16 x 1BR/1BA (650 SF), 8 x 2BR/1BA (850 SF)
Asking Price: $3,200,000
Lot Size: 1.8 acres
Property Class: B+ (good condition, middle-market)

Current Financial Performance:

Gross Rental Income: $360,000/year
Current NOI: $285,000 (79% ratio)
Vacancy Rate: 6% (currently 22 units occupied)
Average Rents: 1BR $1,400/mo, 2BR $1,750/mo
Operating Expenses: $75,000/year
Property Management: 6% of gross income

Operating Expense Breakdown:

Property Taxes: $24,000/year
Insurance: $8,500/year
Utilities (common areas): $6,000/year
Maintenance & Repairs: $18,000/year
Landscaping: $4,200/year
Management: $21,600/year (6%)
Other: $3,700/year

Market Comparables & Analysis:

Recent Sales: Similar properties $125K – $145K per unit
Market Cap Rates: 7.8% – 8.5% for comparable properties
Market Rents: 1BR $1,500-1,600, 2BR $1,850-1,950
Vacancy Rates: Market average 4.5%
Population Growth: 2.8% annually in submarket
Employment: Diversified economy, tech sector growth

Value-Add Opportunities Identified:

Rent Increases: Current rents 8-10% below market
Unit Renovations: $8K/unit could justify $150/mo increase
Expense Reduction: Energy efficiency upgrades ($25K investment)
Ancillary Income: Laundry upgrade, pet fees, storage
Deferred Maintenance: $180,000 identified

Financing Alternatives:

Conventional: 75% LTV, 7.2% rate, 25-year amortization
Portfolio Lender: 80% LTV, 7.8% rate, more flexible underwriting
Seller Financing: Potential for 10% down, owner-carry second
Bridge Loan: For value-add improvements, then refinance

Question 21 of 40:

Calculate the property’s current cap rate based on asking price and NOI:

7.9% 8.9% 9.5% 11.3%

Question 22 of 40:

The asking price of $133,333 per unit compared to market sales of $125K-$145K indicates:

Property is significantly overpriced Pricing is at the low end of market range Pricing is within reasonable market range Property is priced below market value

Question 23 of 40:

With rents 8-10% below market, what is the potential NOI increase from bringing rents to market?

$24,000 – $30,000 $28,800 – $36,000 $32,400 – $40,500 $36,000 – $45,000

Question 24 of 40:

The $180,000 deferred maintenance should be:

Ignored if property cash flows positively Deducted from purchase price in negotiations Factored into total investment and return calculations Addressed only if lender requires repairs

Question 25 of 40:

What should be the PRIORITY due diligence item for this acquisition?

Physical inspection of all 24 units Rent roll verification and lease analysis Environmental assessment Comparable sales verification

Question 26 of 40:

Using conventional financing (75% LTV, 7.2%, 25-year), what is the annual debt service?

$198,500 $212,400 $225,100 $238,800

Question 27 of 40:

What is the cash-on-cash return using conventional financing and current NOI?

6.8% 8.3% 9.1% 10.7%

Question 28 of 40:

The property’s 6% vacancy rate compared to 4.5% market average suggests:

Poor property management or condition issues Rents are too high for the market Normal variation with improvement opportunity Market data is inaccurate

Question 29 of 40:

For negotiation strategy, what is the strongest argument for price reduction?

Deferred maintenance requirements Below-market rents indicating management issues Higher than market vacancy rate All factors combined justify lower pricing

Question 30 of 40:

Based on comprehensive analysis, what is the investment recommendation?

Purchase at asking price – strong fundamentals Negotiate 8-12% price reduction and proceed Require extensive seller concessions for maintenance Pass on investment – insufficient returns

📊 Case Study 4: Portfolio Strategy & Diversification

Modules Tested: Investment Analysis, Portfolio Management, Advanced Real Estate Strategies

💼 Client Profile: High-Net-Worth Portfolio Optimization

Client Background:

Client: Dr. Sarah Chen, successful surgeon
Age: 42, married with two children
Income: $850,000/year household income
Investment Experience: 8 years in real estate
Investment Timeline: 15+ years until retirement
Risk Tolerance: Moderate to aggressive

Current Real Estate Portfolio:

Property 1: 4-unit Denver apartment building – $1.2M value, $85K NOI
Property 2: Single-family rental, Seattle – $950K value, $48K NOI
Property 3: Duplex, Austin, TX – $680K value, $52K NOI
Property 4: Vacation rental, Colorado ski town – $850K value, $65K NOI
Property 5: Strip mall, Phoenix – $2.8M value, $220K NOI
Property 6: Office condo, Dallas – $1.2M value, $96K NOI
Total Portfolio Value: $8.5M
Total NOI: $566K (6.7% overall cap rate)

Current Financing Structure:

Total Debt: $5.1M (60% LTV overall)
Average Interest Rate: 6.8%
Annual Debt Service: $385K
Cash Flow After Debt Service: $181K/year
Cash-on-Cash Return: 5.3% on $3.4M equity

Available Investment Capital:

Liquid Cash: $2.5M (recent property sale proceeds)
Annual Savings: $275K/year from practice
Credit Capacity: Additional $3M borrowing capacity
1031 Exchange: Recent sale qualifying for exchange

Investment Goals & Constraints:

Primary Goal: Diversify beyond residential properties
Target Return: 8-12% IRR over 10+ year hold periods
Geographic Preference: Western US states preferred
Management Style: Professional management, limited active involvement
Tax Optimization: Maximize depreciation and tax benefits
Risk Management: No single property >20% of portfolio

Current Market Opportunities:

Industrial/Warehouse: 6.5-7.5% cap rates, strong demand
Medical Office: 7.0-8.0% cap rates, recession-resistant
Self-Storage: 6.0-7.0% cap rates, expanding market
Multifamily (50+ units): 5.5-6.5% cap rates, economies of scale
REITs: Public/private options for diversification
Real Estate Syndications: Passive investment opportunities

Tax & Legal Considerations:

Tax Bracket: 37% federal, high-income state
Depreciation Strategy: Maximize through cost segregation
Entity Structure: Multiple LLCs for liability protection
Estate Planning: Wealth transfer considerations
Professional Liability: Asset protection priorities

Question 31 of 40:

Analyzing the current portfolio, what is the primary diversification weakness?

Heavy concentration in residential properties (70% of portfolio) Geographic concentration in high-cost Western markets Insufficient leverage reducing returns Too many small properties increasing management burden

Question 32 of 40:

With $2.5M available capital, what is the OPTIMAL first diversification move?

Purchase a $4M industrial property using 75% financing Invest in 3-4 different property types at $600K each Use 1031 exchange proceeds for medical office building Split between direct ownership and REIT investments

Question 33 of 40:

The client’s 5.3% cash-on-cash return suggests what portfolio optimization strategy?

Increase leverage to improve returns Sell underperforming properties Focus on value-add opportunities All of the above strategies should be considered

Question 34 of 40:

For a high-income professional with limited time, which property type provides the BEST fit?

Single-family rentals for hands-on control Large multifamily with professional management Commercial triple-net lease properties Real estate syndications and REITs

Question 35 of 40:

Given the client’s tax bracket (37% federal), what strategy maximizes tax benefits?

Cost segregation studies on all properties Real estate professional status election Opportunity zone investments Bonus depreciation on new construction

Question 36 of 40:

The “no single property >20% of portfolio” rule suggests what about risk management?

Current portfolio violates this with the $2.8M strip mall Rule is too conservative for experienced investors Future acquisitions should be under $1.7M each Rule should guide portfolio rebalancing decisions

Question 37 of 40:

For asset protection given professional liability exposure, what structure is MOST appropriate?

Single LLC holding all properties Separate LLC for each property with umbrella insurance Domestic asset protection trust Offshore entity structures

Question 38 of 40:

The 6.7% overall portfolio cap rate in today’s market indicates:

Strong performance above market averages Average performance with room for improvement Below-market performance requiring attention Cap rate is irrelevant for portfolio analysis

Question 39 of 40:

Which market trend should MOST influence the portfolio strategy over the next 5 years?

Interest rate environment and financing costs Demographic shifts affecting property demand Technology disruption in real estate Climate change and environmental regulations

Question 40 of 40:

Based on comprehensive analysis, what is the PRIORITY recommendation for this portfolio?

Maintain current strategy – portfolio is well-positioned Diversify into commercial properties using available capital Sell residential properties and focus on commercial Reduce portfolio size and increase REIT allocation

📊 Case Study Assessment Results

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Assessment Complete

Calculating results…

Performance by Module:

Case Study 1 (Modules 1-3):

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Case Study 2 (Module 4):

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Case Study 3 (Modules 5-7):

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Case Study 4 (Modules 8-9):

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Builds and Buys

Case Study Analysis

🚨 Professional Certification Assessment

📋 Case Study Assessment Structure

Case Study 1: Mixed-Use Development

Case Study 2: Construction Financing

Case Study 3: Investment Property

Case Study 4: Portfolio Strategy

✅ Ready to Begin Professional Assessment?

📊 Case Study 1: Downtown Mixed-Use Development

🏙️ Development Opportunity: The Metropolitan District Project

Project Overview:

Proposed Development:

Construction & Development Costs:

Market Analysis Data:

Regulatory Requirements:

Key Risk Factors Identified:

Question 1 of 10:

Question 2 of 10:

Question 3 of 10:

Question 4 of 10:

Question 5 of 10:

Question 6 of 10:

Question 7 of 10:

Question 8 of 10:

Question 9 of 10:

Question 10 of 10:

💰 Case Study 2: Construction Financing Optimization

🏠 Project: Luxury Custom Home Construction Financing

Construction Project Details:

Borrower Financial Profile:

Three Financing Options:

Option A: Regional Bank

Option B: Local Credit Union

Option C: National Construction Lender

Current Market Environment:

Question 11 of 40:

Question 12 of 40:

Question 13 of 40:

Question 14 of 40:

Question 15 of 40:

Question 16 of 40:

Question 17 of 40:

Question 18 of 40:

Question 19 of 40:

Question 20 of 40:

🏢 Case Study 3: Investment Property Acquisition

🏠 Investment Opportunity: Garden Grove Apartments

Property Details:

Current Financial Performance:

Operating Expense Breakdown:

Market Comparables & Analysis:

Value-Add Opportunities Identified:

Financing Alternatives:

Question 21 of 40:

Question 22 of 40:

Question 23 of 40:

Question 24 of 40:

Question 25 of 40:

Question 26 of 40:

Question 27 of 40:

Question 28 of 40:

Question 29 of 40:

Question 30 of 40:

📊 Case Study 4: Portfolio Strategy & Diversification

💼 Client Profile: High-Net-Worth Portfolio Optimization

Client Background:

Current Real Estate Portfolio:

Current Financing Structure:

Available Investment Capital:

Investment Goals & Constraints:

Current Market Opportunities:

Tax & Legal Considerations:

Question 31 of 40:

Question 32 of 40:

Question 33 of 40:

Question 34 of 40:

Question 35 of 40: