In today’s real estate market
Many homeowners are wondering how to grow their wealth without having to inject additional savings. One question often comes up:
Can you buy a multi-unit property (plex) with no cash down — using only the equity accumulated in your primary home?
The answer: yes, it’s possible — under certain conditions.
What is equity?
Equity represents the portion of your property that you truly own.
In other words, it’s the difference between your home’s current market value and the remaining balance on your mortgage.
For example:
If your home is worth $600,000 and you still owe $350,000, your equity is $250,000.
This amount isn’t liquid cash, but it can be used as leverage to finance a new real estate purchase.
Using equity to buy a multi-unit property
Financial institutions often allow you to use part of this equity as a down payment for a second property such as a duplex, triplex, or fourplex.
There are two main ways to do this:
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Mortgage refinancing – You take out a new mortgage on your current home to access part of your equity.
You can usually borrow up to 80% of the market value of your home, minus the existing loan balance.
The withdrawn amount can then serve as the down payment for the plex. -
Home Equity Line of Credit (HELOC) – A more flexible option that lets you borrow against your equity as needed, without having to fully refinance your mortgage.
A concrete example
Let’s take a simple scenario:
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Current home value: $700,000
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Mortgage balance: $400,000
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Available equity: $300,000
The bank might allow you to borrow up to 80% of your home’s value — that’s $560,000.
This means you could withdraw $160,000 ($560,000 – $400,000) to invest in a plex and cover the down payment, notary fees, and possibly even part of the renovations.
Conditions to meet
Even if you don’t need liquid savings, the bank will evaluate several factors before approving your loan:
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Your borrowing capacity (income, debts, debt-to-income ratio).
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The market value and stability of your current property.
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The projected profitability of the plex (expected rental income vs. expenses).
In short, equity is a powerful lever, but it doesn’t replace solid financial health or a strong application.
Advantages of this strategy
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Little to no cash required.
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Leverage effect: your home helps you acquire a second income-generating asset.
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Wealth growth: rental income helps repay the mortgage while increasing your real estate portfolio’s value.
Risks to consider
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Higher total debt, which can impact your budget.
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The risk of a decline in property values, which could reduce your equity.
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Greater responsibility from managing tenants and property maintenance.
In conclusion
Buying a multi-unit property with no cash down, using only the equity from your primary home, is absolutely possible — and can be a powerful way to build long-term real estate wealth.
However, like any major financial decision, it requires careful analysis, along with guidance from an experienced mortgage broker and real estate broker to help you navigate each step.
If you found this article on real estate informative and would like more information, do not hesitate to contact Emmanuel Paquin, your residential and commercial real estate broker. Emmanuel serves the Montreal and Kirkland regions and is affiliated with the company RE/MAX ROYAL (JORDAN) INC.. You can reach him by phone at (514) 757-6268 or visit his website at the following address: https://emmanuelpaquin.com/.
For those specifically targeting the Montreal residential market, Françoise Cardyn is also available to answer your questions. As a residential real estate broker at RE/MAX ROYAL (JORDAN) INC., she can be contacted at (514) 557-4523. For more information or to send an email, visit https://emmanuelpaquin.com/.
With the Emmanuel Paquin Team, you benefit from the expertise of a strong and experienced team in real estate in Montreal. For any questions, contact us at (514) 757-6268 or by email at info@emmanuelpaquin.com.
We hope this article has been helpful to you and we invite you to contact our brokers for any real estate questions or needs in Montreal and Kirkland.
