Some Vancouver homeowners are turning their single-family lots into seven-figure wealth creation opportunities through multiplex development. Here's the actual math behind these gains—including the real case studies, risks, and who this strategy actually works for.
When I first heard a client claim he’d created over a million dollars in equity by building a multiplex on his lot, I was skeptical. These things always sound better in the retelling than in the actual accounting.
So I asked to see his numbers. Not the summary version—the complete breakdown. Purchase price, construction costs, every fee, every delay, every change order. The sale prices for units he sold and the appraised value of the units he kept.
He sent me a spreadsheet with 147 line items. I spent an evening going through it, checking his math, adjusting for items I thought he’d miscategorized.
His claim wasn’t exaggerated. He’d turned a $4.2 million property into a net position worth $5.5 million in 26 months. Net of all costs, including the ones people forget to mention. The equity gain was $1.3 million.
That conversation changed how I think about multiplex development for homeowners. Not because everyone can replicate his results—they can’t. But because the opportunity is real for those who qualify, and understanding the actual mechanics matters more than the headline numbers.
The Builder Math That Makes This Work
Before diving into case studies, let’s establish how multiplex development creates value. The concept is simple even if the execution is complex.
The Core Formula
A single-family lot has a certain value based on what can be built on it. Under old zoning, that was one house. Under Bill 44’s R1-1 zoning, that same lot can support 3-6 strata units (or up to 8 rental units).
More buildable units means more revenue potential. More revenue potential means the land is worth more. But here’s the key insight: you can capture that increased value by building rather than selling.
If you sell your lot to a developer, they pay you a premium over single-family value—but they capture the remaining upside. If you build yourself (or partner with a builder), you capture the full development value.
Let me illustrate with numbers:
Scenario A: Sell to Developer
- Single-family home value: $3.5 million
- Developer offer: $4.5 million (28% premium)
- Your gain: $1.0 million
Scenario B: Build Yourself
- Single-family home value: $3.5 million
- Completed multiplex value: $8.5 million
- Construction and soft costs: $3.2 million
- Net position: $5.3 million
- Your gain: $1.8 million
Both scenarios create wealth. Building captures an additional $800,000—but requires capital, time, risk tolerance, and execution capability that selling doesn’t.
Why the Gap Exists
Developers aren’t stupid. They know the completed value of what they’re building. So why don’t they pay the full premium?
Three reasons:
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Risk compensation: They take construction risk, market risk, permit risk. That risk has a price.
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Profit margin: Developers need returns to justify their capital and effort. Industry standard is 15-20% on project costs.
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Time value: Their capital is tied up for 2+ years. That has opportunity cost.
When you develop yourself, you accept those same risks—and capture the same rewards. The question is whether you’re equipped to do so.
Case Study 1: The Hastings-Sunrise Sixplex
Let me walk through a real project from a client I’ll call David. The numbers are accurate; I’ve changed identifying details for privacy.
The Starting Position
David bought his Hastings-Sunrise home in 2011 for $680,000. By early 2024, it was worth approximately $2.8 million—a modest single-family home on a 50’ × 120’ lot with lane access.
He’d raised his kids there. They’d left for university. The house was too big for David and his wife, and they’d been thinking about downsizing.
When Bill 44 passed, David started researching. His lot qualified for maximum density: six strata units or eight rental units. He came to me asking whether development made sense versus simply selling.
The Development Plan
Working with an experienced multiplex builder, David structured a deal:
- Builder would handle all construction, permits, and project management
- David would retain two ground-floor units (designed as one large unit for his occupancy)
- Builder would sell four units at market prices
- Costs would be split proportionally based on retained value
The key advantage: David didn’t need to come up with cash. His land equity funded his share of development costs.
The Numbers
Pre-development position:
- Property value: $2.8 million
- Mortgage balance: $0 (paid off)
- Net equity: $2.8 million
Development costs (total project):
- Soft costs (design, permits, fees): $485,000
- Hard construction costs: $2,680,000
- Carrying costs (18 months): $195,000
- Contingency used: $142,000
- Total: $3,502,000
Completed value:
- 4 market units sold: $5,840,000 (avg $1,460,000 each)
- 2 retained units appraised: $2,920,000
- Total project value: $8,760,000
David’s outcome:
- Sale proceeds (his share): $0 (he kept units)
- Construction cost share: $1,168,000 (33% of costs, matching his 33% of units)
- Net equity in retained units: $2,920,000 - $1,168,000 = $1,752,000
- Original equity invested: $933,000 (33% of land value attributed to his units)
- Net gain: $819,000
David now lives in a brand-new, accessible ground-floor unit worth $2.9 million. He invested his land equity (no cash) and gained $819,000 in additional equity over 26 months.
What Went Right
- Partner selection: The builder had completed 14 multiplexes previously. Experienced execution minimized delays and cost overruns.
- Design for retention: Planning his units as ground-floor with separate entrance made living there during and after construction feasible.
- Market timing: Units sold in a relatively stable market. Prices achieved matched projections.
- Contingency management: The $142,000 in overruns was within the $200,000 contingency budgeted.
What Went Wrong (And How It Was Managed)
The project wasn’t perfect. Three significant issues emerged:
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Permit delays: Initial timeline projected 10 months from application to construction start. Actual was 14 months. The additional 4 months cost approximately $52,000 in carrying costs.
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Electrical upgrade: BC Hydro required transformer upgrades that weren’t apparent in initial assessment. Cost: $28,000 above budget.
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One unit sold below projection: The smallest unit (890 sq ft) sold for $1,180,000 vs. projected $1,280,000. The market for sub-1,000-sq-ft units was softer than anticipated.
Total impact of issues: approximately $150,000 in reduced returns. Still well within profitable territory, but a reminder that projections are estimates, not guarantees.
Case Study 2: The Kerrisdale Transformation
Different neighbourhood, different structure, different outcome. This one shows what’s possible with a premium West Side location—and what can go wrong.
The Starting Position
Margaret and Robert owned a 52’ × 122’ lot in Kerrisdale with a 1962 rancher worth approximately $5.0 million. They were approaching 70, thinking about estate planning, and concerned about the large house’s maintenance requirements.
Their lot’s premium location meant premium development potential—but also premium stakes if something went wrong.
The Structure
Rather than partnering with a builder, Margaret and Robert chose a different model: they hired a project manager to coordinate construction with multiple trades, maintaining direct control.
This approach can work well for sophisticated owners. Margaret had 30 years of corporate project management experience. They thought they could handle it.
The Numbers
Pre-development position:
- Property value: $5.0 million
- Mortgage balance: $0
- Net equity: $5.0 million
Development costs:
- Soft costs: $620,000
- Hard construction (original budget): $3,100,000
- Hard construction (actual): $3,890,000 (25% overrun)
- Carrying costs (24 months): $320,000
- Total actual: $4,830,000
Completed value:
- 4 units sold: $7,680,000 (avg $1,920,000 each)
- 2 units retained: $3,840,000
- Total: $11,520,000
Margaret and Robert’s outcome:
- Sale proceeds (their share): $2,560,000 (4 units at 33% project share)
- Wait—let me recalculate their actual structure…
They retained all 6 units initially, then sold 4 to recoup development costs.
- Construction costs paid: $4,830,000
- Units sold: 4 @ $1,920,000 = $7,680,000
- Net cash after sales: $7,680,000 - $4,830,000 = $2,850,000
- Retained units value: $3,840,000
- Total position: $6,690,000
- Original equity: $5,000,000
- Net gain: $1,690,000
Despite significant cost overruns, they created $1.69 million in equity and own two premium Kerrisdale units outright plus $2.85 million in cash.
What Went Wrong
The 25% cost overrun ($790,000) had multiple causes:
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Rock: Geotechnical report identified “some rock.” “Some” turned out to be a significant underground shelf requiring blasting. Cost: $185,000 above budget.
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Scope creep: Margaret and Robert made design changes during construction—upgraded finishes, modified layouts, added features. Individual changes seemed small; cumulative impact was $340,000.
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Trade coordination issues: Without an experienced builder, trade scheduling was inefficient. Delays cascaded. The project ran 6 months longer than planned, adding carrying costs and inflation to remaining work.
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Permit revisions: City required design modifications after initial approval due to neighbour complaints about massing. Redesign and resubmission cost $95,000 in architect fees and delays.
The Lessons
Margaret and Robert’s project still succeeded—$1.69 million in gains is exceptional by any standard. But the gap between projected returns ($2.3 million) and actual returns ($1.69 million) represents $600,000 in erosion.
Their sophistication helped them navigate the problems. Less experienced homeowner-developers might have faced worse outcomes.
Case Study 3: The One That Struggled
Not every project succeeds. Here’s one where the outcome was positive but far below expectations—and what went wrong.
The Situation
James owned a 45’ × 110’ lot in Riley Park. The narrower-than-ideal width limited him to 5 units maximum rather than 6. But the location was strong, and he proceeded.
What Went Wrong
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Financing collapsed: James’s initial construction lender withdrew midway through permitting due to changing risk appetite. Finding replacement financing took 5 months and came at higher rates.
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Builder dispute: Cost overruns led to disputes over change order pricing. The builder eventually completed work but the relationship deteriorated, affecting quality attention.
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Market shift: Units came to market in late 2025 when interest rates were peaking. Two units sat unsold for 4 months, requiring price reductions.
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Strata issue: One buyer discovered a deficiency after closing and launched a strata claim. While ultimately resolved, legal costs and stress were significant.
The Numbers
Original projection:
- Development profit: $680,000
Actual outcome:
- Development profit: $190,000
Still positive—James didn’t lose money. But $190,000 over 30 months represents a return that barely justified the effort, stress, and risk. He’d have been better off selling to a developer and investing the proceeds.
The Honest Assessment
James made decisions that seemed reasonable at each step. The narrower lot, the aggressive timeline assumptions, the builder selection—none were obviously wrong. But compounding small disadvantages into a challenging market produced mediocre results.
This project illustrates why qualification matters. Not everyone should attempt development, and not every property suits it.
Who This Strategy Actually Works For
Based on dozens of conversations and the projects I’ve observed, multiplex millionaire strategies require specific conditions:
Property Qualifications
Your lot needs to support development economics:
- Lot width 49.5’+ preferred: Maximum units (6 strata) require this threshold. Narrower lots can work but with tighter margins.
- 6,000+ sq ft area: Larger lots produce more sellable square footage and better returns.
- Lane access: Dramatically simplifies parking and access, reducing costs.
- Reasonable topography: Slopes, rock, and challenging soil conditions erode margins.
- Good neighbourhood: End-unit values drive returns. Premium locations justify premium construction costs.
Personal Qualifications
Beyond property, you need personal capacity:
- Low or no existing mortgage: Cash flow during development is challenging with significant debt service.
- Liquid reserves: Even with construction financing, unexpected costs require cash buffers. $100,000-$200,000 minimum.
- Timeline flexibility: Projects take 2-3 years. If you need to sell or access equity in 12 months, development isn’t appropriate.
- Risk tolerance: Things go wrong. You need emotional and financial capacity to handle setbacks.
- Either expertise or willingness to defer: If you lack development experience, you must partner with those who have it and actually listen to their guidance.
Financial Qualifications
The numbers need to work:
- Land value below 50% of completed project value: If your lot is already valued at development prices, there’s less upside to capture.
- Construction financing available: Banks want experience and equity. First-time developers face higher barriers.
- Contingency capacity: Budget 15-20% contingency. If you can’t fund overruns, the project can collapse.
Disqualifying Factors
Some situations where development doesn’t make sense:
- Significant mortgage: If you owe $2 million on a $3 million property, your equity isn’t sufficient to weather setbacks.
- Tight timeline: Need to access capital within 18 months? Sell rather than develop.
- Risk aversion: If a potential $200,000 loss would cause severe financial or emotional hardship, this isn’t your strategy.
- Partner disagreement: If spouses or co-owners have different risk tolerances or expectations, resolve that before proceeding.
- Marginal lot: A 35’ × 100’ lot with challenging topography might work—but the risk-reward ratio is poor.
The Risks They Don’t Mention
Most articles about multiplex development focus on upside. Let me be explicit about what can go wrong:
Construction Cost Overruns
The industry average is 10-15% overruns. Complex projects, inexperienced builders, and challenging sites see 20-30%. Budget for it.
Causes: material price increases, trade availability, design changes, unforeseen site conditions, permit-required modifications.
Market Timing Risk
Units need to sell at projected prices for returns to materialize. Markets change over 2-3 year development cycles. The project that looked profitable at 2024 prices might struggle at 2026 prices.
Interest rate increases particularly affect buying power. A rate increase of 1% reduces buyer purchasing capacity by roughly 10%.
Permit and Timeline Delays
Vancouver’s permit timelines are improving but remain uncertain. Every month of delay costs carrying costs ($10,000-$20,000+ on significant projects).
Delays compound: permit delays push construction into different seasons, affect trade scheduling, extend financing terms, and erode returns.
Partnership Failures
Builder bankruptcies happen. Disputes over cost allocation occur. Personal relationships between partners deteriorate under project stress.
Structure agreements carefully. Maintain financial reserves to survive partner failure. Don’t assume goodwill survives 18 months of construction challenges.
Quality and Warranty Issues
New construction can have defects. Strata corporations can pursue warranty claims. Reputation damage and legal costs follow.
Work only with builders who have track records and adequate insurance. Inspect carefully before completion.
Personal Circumstances Change
Divorce, health issues, job loss, death—life happens. Development projects are illiquid. If you need to exit mid-project, options are limited and typically expensive.
Making the Decision
Should you pursue the multiplex millionaire strategy? Here’s a framework:
Step 1: Assess Your Property
Does your lot qualify for maximum density? What’s the realistic completed value based on neighbourhood comparables? What constraints exist (topography, trees, access)?
Step 2: Calculate True Costs
Not just construction estimates—include soft costs, fees, carrying costs, contingency. Use realistic timelines, not optimistic projections.
Step 3: Model Multiple Scenarios
What returns look like if: construction costs overrun 15%? Timeline extends 6 months? Sale prices drop 10%? Run sensitivity analysis.
Step 4: Compare to Alternative
What would you net by simply selling to a developer? If development returns are only modestly higher than sale premiums, does the incremental gain justify the risk and effort?
Step 5: Assess Personal Fit
Beyond numbers, do you have the temperament, timeline flexibility, and risk capacity for development? Be honest.
Step 6: Build Your Team
Don’t proceed without: experienced builder (if partnering), real estate lawyer, tax accountant, and knowledgeable realtor. The cost of this expertise is trivial compared to the cost of errors.
Frequently Asked Questions
Can I do this with a mortgage on my property?
It depends on the mortgage size. If you have 80%+ equity, it’s potentially feasible. If you have 50% equity, the math gets challenging—you’ll need significant cash reserves. Less than 50% equity typically doesn’t work.
How long does the entire process take?
From deciding to proceed through selling completed units: 24-36 months typically. Permit phase: 10-16 months. Construction: 12-18 months. Sales: 2-6 months (if units don’t sell immediately).
What happens if I run out of money mid-construction?
This is the nightmare scenario. Options include: emergency equity injection (if possible), selling partially completed project to another developer (at steep discount), or worst case, lender takes over. Avoid this by maintaining adequate reserves and contingency.
Can I live on site during construction?
Usually not feasible during active construction. Some projects allow occupancy of a separate structure (coach house, temporary residence) during construction phase. Plan for 12-18 months of alternative housing.
What are the tax implications?
Complex and situation-dependent. If this is your principal residence, significant exemptions may apply. If you’re keeping units as rentals, different rules apply. If you’re selling all units, you may be deemed a developer subject to GST and business income treatment rather than capital gains. Consult a real estate tax accountant before proceeding—the differences can be six figures.
Should I partner with a builder or hire my own trades?
For most homeowner-developers, partnering with an experienced builder reduces risk substantially. The builder’s profit margin is the cost of their expertise, risk-bearing, and trade relationships. Going direct saves that margin but requires experience, time, and risk tolerance most homeowners lack.
The Bottom Line
Multiplex millionaire stories are real. The strategy works for homeowners with the right properties, financial capacity, and risk tolerance. Gains of $500,000 to $1.5 million are achievable on well-executed projects.
But the stories that don’t get told are equally real. Projects that struggled, relationships that fractured, stress that lasted years, returns that disappointed. Development isn’t passive income or guaranteed wealth—it’s a business activity with business risks.
If you have a qualifying property and meet the personal criteria, this strategy deserves serious consideration. The returns available through development meaningfully exceed what’s available through simple sale.
If you don’t meet the criteria—or aren’t sure—selling to a developer who does this professionally is a perfectly good outcome. Capturing a $1 million premium on your lot without the stress of development is still a $1 million premium.
The decision depends on your specific circumstances. Understanding the real numbers—not the marketing numbers—is where that decision starts.
Getting Clarity on Your Situation
I’ve helped Vancouver homeowners evaluate both paths: selling to developers and pursuing development themselves. The right answer depends on property specifics, personal circumstances, and risk tolerance.
A detailed analysis of your situation—property potential, realistic returns, risk factors, and alternatives—is the foundation for making this decision well. That analysis takes work but saves costly errors.
If you’re seriously considering the multiplex millionaire strategy, let’s talk through the specifics of your situation. I’ll give you honest numbers and honest assessments, not sales pitches.
Contact Greyden Douglas directly at (604) 218-2289 or book a call to discuss your Vancouver real estate goals.
