How a $10,000 Down Payment Turned Into $100K Profit: Real Investor Success Story in Scarborough, ON
Case Study Overview
Property investment completed in Scarborough, Ontario. Client secured short-term financing for renovation and resale project.
Key Metrics:
- Mortgage Amount: $627,000
- Down Payment: $10,000
- Position: First mortgage
- LTV: 66.21% (based on after-repair value)
- Interest Rate: 17.25%
- Timeline: 3.5 months
- Net Profit: $100,000
Project Structure
Financing Terms:
- First mortgage position
- Short-term private lending
- Interest-only payments during renovation
- Exit strategy: Property sale upon completion
Property Details:
- Location: Scarborough, Ontario
- Purpose: Renovation and resale
- After-repair value calculation: LTV 66.21%
Down Payment Strategy
Client invested $10,000 total for:
- Property acquisition
- Renovation costs
- Carrying costs during project
Capital Requirements:
- Down payment: $10,000
- Mortgage funding: $627,000
- Total project value supported by after-repair value assessment
Timeline Breakdown
Month 1:
- Property acquisition completed
- Renovation planning finalized
- Construction commenced
Month 2-3:
- Active renovation period
- Property improvements executed
- Market preparation initiated
Month 3.5:
- Project completion
- Property listing and sale
- Mortgage discharge
Financial Analysis
Revenue Structure:
- Sale price achieved target after-repair value
- Gross profit generated: $100,000
- Return on invested capital: 1000%
Cost Components:
- Interest payments at 17.25%
- Renovation expenses
- Carrying costs
- Transaction fees
Risk Management
LTV Calculation:
- Based on after-repair value: 66.21%
- Conservative valuation approach
- Market analysis verification
Exit Strategy Elements:
- Clear resale timeline
- Market demand assessment
- Price point validation
Low Down Payment Benefits
Capital Efficiency:
- Minimal upfront investment required
- Preserved liquidity for additional opportunities
- Leveraged financing structure
Portfolio Flexibility:
- Multiple project capability
- Risk distribution across investments
- Cash flow management optimization
Alternative Lending Structure
Private Mortgage Features:
- Speed of approval and funding
- Asset-based underwriting
- Flexible terms for renovation projects
- Short-term commitment alignment
Comparison to Traditional Financing:
- Conventional mortgages: Lengthy approval process
- Private lending: Project-specific evaluation
- Interest rate reflection of risk and timeline
Scarborough Market Factors
Location Advantages:
- Established residential market
- Renovation opportunity availability
- Buyer demand consistency
- Price appreciation potential
Market Timing:
- Project completion aligned with market conditions
- Seasonal considerations addressed
- Buyer activity optimization
Investment Strategy Implementation
Project Selection Criteria:
- After-repair value calculation accuracy
- Renovation scope definition
- Timeline feasibility assessment
- Market demand validation
Execution Requirements:
- Contractor coordination
- Budget management
- Timeline adherence
- Quality control maintenance
Financing Application Process
Documentation Requirements:
- Property assessment
- Renovation plans
- Budget projections
- Exit strategy documentation
Approval Factors:
- After-repair value verification
- Client experience evaluation
- Project viability assessment
- Risk analysis completion
Disclaimers and Considerations
Interest Rate Variables:Interest rates and fees determined on deal-by-deal basis. Multiple factors influence rate determination. Contact for current rate information.
Profit Considerations:Net profits not guaranteed. Results vary depending on project specifics, market conditions, and execution quality.
Risk Factors:
- Market fluctuation impact
- Renovation cost overruns
- Timeline extension possibilities
- Sale price variations
Alternative Lending Access
Private mortgage options available for qualified borrowers. Project-specific evaluation process. Professional consultation recommended for investment planning.
Service Categories:
- Short-term renovation financing
- Bridge loan solutions
- Investment property funding
- Alternative qualification criteria
For investment financing consultation: Contact mortgage services
Additional Resources:
- Alternative lender information: Bad credit solutions
- First-time buyer guidance: Home buying guide
Project Success Factors
Critical Elements:
- Accurate after-repair value assessment
- Realistic renovation timeline
- Market analysis precision
- Professional contractor selection
Outcome Drivers:
- Project completion within budget
- Timeline adherence
- Market timing optimization
- Quality renovation execution
This case study demonstrates successful implementation of low down payment investment strategy using private mortgage financing for renovation and resale project in Scarborough, Ontario market.