How to Build a Multiplex—with Zero Cash Out of Pocket—and Walk Away with a Million-Dollar Profit

If you own a single-family home in Vancouver, there’s a good chance you’re sitting on untapped wealth—possibly even seven figures worth—courtesy of Bill 44. Under this new legislation, homeowners can now build multi-unit dwellings (fourplex, sixplex, etc.) on single-family lots, transforming what was once just a house into a major equity-building machine.

But the #1 question I hear is: “How on Earth do I finance that?”

The short answer might surprise you: many homeowners won’t need to spend a dime out of pocket to make it happen.

Financing the Build: Tapping the Equity in Your Land

Why $0 Cash Out of Pocket Is Possible

Vancouver’s real estate market is expensive, no doubt about it. However, that sky-high land value can actually work in your favor when converting to a multiplex. Thanks to years of appreciation, if you own your property outright or have a relatively small mortgage, the loan-to-value (LTV) ratio stays well under 60%. In concrete terms:

1. Your land acts as equity that secures the entire construction budget, from permitting and design to actual build costs.
2. Because you’re only borrowing up to ~60% of your property’s post-construction value, lenders consider it a relatively low-risk loan.
3. Result: You can build your multiplex using 100% construction financing—no extra cash down.

For example, if your existing lot is worth, say, $2 million, you might need about $2.5 million to demolish the old house, design, and build four to six brand-new units. As long as you have enough equity (i.e., a low or zero mortgage), lenders are often willing to finance the entire $2.5 million without you reaching into your savings.

The Catch with Traditional Banks

If you’re thinking, “Great, I’ll just go to my usual bank,” I’d advise caution. Most major lenders don’t offer standalone construction loans; they want you locked into a 25-year mortgage after the build so they can collect interest long term. They often require you to keep all the newly constructed units and rent them out—no selling allowed—because that suits their underwriting model.

That’s a non-starter for most homeowners who want to sell some (or all) of the new units to walk away mortgage-free with an infusion of cash. So if you plan to pay off your mortgage after the units sell, many big banks simply won’t do it.

A New Breed of “Multiplex-Only” Mortgage

Realizing the big banks weren’t flexible enough, I partnered with alternative lenders to create a construction-only, interest-only loan specifically for Bill 44 projects. Key features:

• No 25-year lock-ins – You can pay off the principal immediately after the sale of the new units.
• No massive penalties – If you pay it off in 12–18 months, you aren’t penalized for early repayment.
• Even the interest is paid for you – Payments are interest-only during construction, and there is enough capacity within the 60% LTV to pay the interest as well.

This is crucial because, at the end of the project, you’ll likely sell some or all of the units—pocket your profit—and eliminate the debt before it can balloon. Imagine converting your house into four or six brand-new units, selling three or five of them, and living in the last one mortgage-free. You come out ahead not just with extra cash, but also with a new home customized for your family.

(If you’ve got a clever name for this new “multiplex-only mortgage,” drop it in the comments. We’re running a contest to pick the best one—winner gets a free feasibility analysis on their property.)

The Profit Potential: Why It’s Often Seven Figures

From running dozens of financial proformas across Greater Vancouver, we’re seeing a typical range of $1 million to $2 million in net profit—after you’ve paid all build costs, fees, and selling expenses. This means:

1. You still have one unit (or more) for yourself (often a spacious 2- or 3-bedroom).
2. You sell the extra units at market rates.
3. You pay off the construction financing in full.
4. Most of the time you're left with $1M+ in your pocket—sometimes well above that, depending on the neighborhood.
5. The value of your new unit plus the profit is usually over a $1M more than if you just sold the house as-is.

Even after factoring in taxes (capital gains or corporate structures), many homeowners end up with a healthy seven-figure boost.

Mortgage Free—For Real

The beauty of this Bill 44 approach is that you’re not stuck with a monster mortgage at the end. The entire point of a “construction-only, interest-only” loan is to facilitate building and selling. Once the units are gone, the principal is paid off.

Picture this scenario:

• Step 1: Use your lot’s equity to secure construction financing.
• Step 2: Build four to six sleek, modern units on your existing property.
• Step 3: Sell enough units to cover your entire construction loan—plus taxes and fees.
• Step 4: Move into your remaining mortgage-free unit with a sizable lump of cash in your bank account.

Avoiding Common Financing Pitfalls

Building a multiplex might sound straightforward, but you can easily end up with a flawed deal structure if you’re not careful:

1. Balloon Payments: If your lender requires a giant repayment at a specific time, but your units haven’t sold or closed, you could face major penalties or even foreclosure.
2. Rental-Only Restrictions: Some banks might demand you keep all the units and place them under rental agreements—which kills your cash-out opportunity.
3. Hidden Fees & Prepayment Penalties: Even interest-only loans can carry hidden line items that eat into your final profit if you sell units early.

That’s why having a specialized “ecosystem” matters: CPAs to minimize taxes, multiplex marketing capable realtors to ensure top-dollar sales, and mortgage pros who’ve already structured Bill 44 loans that align with how (and when) you plan to sell.

But What About Tax?

The unit(s) you keep are not taxable, but the units you sell are taxable. The key is minimizing it. Some strategies include:

• Capital Gains vs. Active Income: Depending on how you structure the project, at least some of your profit might be eligible for capital gains treatment (lower than regular income tax).
• Corporate vs. Personal: For homeowners with existing businesses or corporations, transferring a property or building under a corporate umbrella can open up tax rates as low as 11%. Pro hint: you can also open a new corp. to loan the property to.
• Rolling the Profit: If you plan more developments, you can roll profits forward in certain scenarios.
• Estate Planning: If you don't have this done already this is a great time to do it. The tax strategies need to be informed by your personal financial circumstances and assets.

I always recommend getting a good CPA that specializes in tax reduction from the disposition of assets involved from the start—something we help coordinate—so you don’t get blindsided at the final sale.

Ready to Explore Multiplex Financing?

Whether you want a quick million-dollar gain or a long-term, mortgage-multigenerational free living arrangement (or both!), the numbers on Bill 44 multiplexes are compelling. If your home has significant equity—and you’re willing to temporarily relocate during construction—it could be a once-in-a-generation chance to restructure your life financially.

Here’s how to get started:

1. Reach Out for a Feasibility Check: We’ll run a no-obligation financial pro forma on your lot to see if it’s viable.
2. Discuss Financing Options: Learn what type of construction loan you can secure and the rates/terms that best fit your exit plan.
3. Plan Your Post-Sale Windfall: Work with tax advisors and our real estate partners to market and sell the units.

If you’re curious, shoot me an email at David@AlairHomes.com. Let’s see if your property is the next candidate for a multiplex transformation—and if so, let’s do it in a way that sets you up for a significant financial win.

(Remember, if you have a great name for our “multiplex-only mortgage,” drop it in the comments. We’ll pick a winner and offer a free feasibility study on their property—our way of saying thanks for helping us find a title that isn’t as boring as “interest-only short-term lending.”)

Conclusion

To me, Bill 44 represents an unprecedented opportunity for regular homeowners to unlock big, developer-level gains—without having to beg banks for a conventional mortgage. Leverage your land’s built-up equity, find the right financing partner, and you’ll walk away not just with an upgraded home, but a life-changing pile of cash. If you’ve ever wanted a blueprint to seriously accelerate your net worth, this might be it.

David Babakaiff

Award-Winning Multiplex & Multi-Generational Home Specialist | Helping BC Homeowners Convert, Build, and Profit