Value-Add Strategies for Multi-Family Investing: Forcing Appreciation
In this episode of the Wisdom Lifestyle Money Show, host Scott Dillingham welcomes Jennifer Champion and Christine Traynor from LendCity's commercial mortgage team to explore value-add strategies for multi-family apartment buildings. They emphasize shifting focus from pure cashfl…
In this episode of the Wisdom Lifestyle Money Show, host Scott Dillingham welcomes Jennifer Champion and Christine Traynor from LendCity's commercial mortgage team to explore value-add strategies for multi-family apartment buildings. They emphasize shifting focus from pure cashflow to forcing appreciation through rent increases to market levels and expense reductions, which are more controllable than in single-family investments. Drawing from their own active investing experiences, the guests explain how renovations and stabilization can dramatically boost property values, leading to tax-efficient wealth building without relying on market comparables.
Using a practical example, they illustrate purchasing a $1.5 million building, investing $200,000 in upgrades, and refinancing at $2.1 million for a $1.57 million loan at 75% loan-to-value, effectively recovering initial capital for infinite returns. The discussion covers essential financing tools like bridge loans for interest-only payments during renovations and takeout financing for long-term holds, including CMHC Standard and MLI Select options for higher leverage. They highlight the importance of calculating double closing costs and fees when planning profits.
The episode also addresses market selection, noting landlord-friendly regions like Alberta where value-add thrives due to flexible rent adjustments, while rent-controlled areas pose challenges. As of November 2025, Alberta's multifamily sector remains strong, with Calgary and Edmonton seeing low vacancies, population growth, and demand for upgraded units, making it ideal for these strategies. U.S. markets offer similar opportunities. This insightful conversation provides actionable tips for investors aiming to scale portfolios sustainably.
Key Takeaways
- Forcing Appreciation Over Cashflow: Prioritize raising rents to market and cutting expenses in multi-family for controllable value growth, avoiding taxes on cashflow while building equity.
- Value-Add Example: Buy at $1.5M, renovate for $200K, stabilize to $2.1M value, refinance at 75% LTV for $1.57M loan, recovering capital for infinite returns.
- Two-Loan Financing Strategy: Use bridge loans (interest-only) during stabilization, then switch to takeout financing like CMHC for long-term holds and higher loan-to-values.
- Market Considerations: Excel in landlord-friendly areas like Alberta; as of 2025, Calgary and Edmonton boast booming demand and value-add potential due to population influx and low vacancies.
- Predictable Outcomes: Unlike single-family, multi-family appreciation is driven by internal improvements, enabling accurate refinance projections and portfolio expansion.
- Expert Advice Integration: Work with seasoned professionals for market analysis, cost calculations, and financing to maximize transparency and long-term wealth.
Links to Show References
- Book a Call with Jennifer Champion: calendly.com/jennifer-lendcity/30min
- Book a Call with Christine Traynor: calendly.com/connect-christinetraynor/mortgage-strategy-call-with-christine-traynor
- LendCity Mortgages: lendcity.ca
- Wisdom Lifestyle Money Show Podcast: podcast.lendcity.ca
- (00:03) - Introduction to Value Add Strategies
- (01:32) - Understanding Loan Types for Investors
- (03:42) - Implementing Strategies in Favorable Markets
Transcript
Introduction
Welcome to the Wisdom Lifestyle Money Show. I'm your host, Scott Dillingham. The show is designed to help Canadians invest better in Canada and the United States. We are the North America-based mortgage financing lender and provide education to both countries.
Discover how you can become a better investor and access the financing you need. Welcome back to the Wisdom Lifestyle Money Show.
I'm your host, Scott Dillingham. Today, we have our next installment of the commercial investing topics that we told you we're gonna go over and I'm really excited about today's. I have Jennifer Champion and Christine Treanor on with us and we are going to talk about value add for multifamily apartment buildings and strategies and how this is a game-changing topic. So I'll turn it over to you, Jennifer and Christine.
So welcome. Thanks, Scott.
The Core Idea
Yeah, you're welcome. So one thing that I really wanna touch on, I think that when people go into multifamily, they focus a lot on cashflow. And yes, cashflow is great, but you are also taxed on cashflow. So today, we just really wanna talk about forcing appreciation and how you can do that in the multifamily space.
So one of the best ways to do that is to be raising rents, to market rents. Very different than in a single family space when you are raising your income and lowing your expenses in multifamily. It's all very controllable and you can really predict like what that refinance is going to look like. Whereas in single family, it's really based on your comparables and the houses around you.
5 million. You put $200,000 into renovations and then you stabilize all the rents in your building to market rents.
1 million. 57 million. So with this strategy, you have taken out your original capital and created equity in the property. Of course, you know, we can get into other products like CMHC Standard and MOI Select, which allows you to do higher loan to values.
Deep Dive
But right there, you've turned a building. You now own it essentially with $0 out of your pocket and the returns are infinite.
That's awesome. I love it. So could you explain, because for the investor who's thinking of this, they might just want to apply and think that they can get renovations and it's all good to go. And, but there's, there's different steps there.
What are the two different types of loans? Because we need two loans for this type of product, ideally. So could you explain what those are for an investor who's listening?
Yeah. So depending on, you know, the strength of the numbers on purchase, you can use a credit union and go 75% loan to value. You know, definitely a better strategy is to do what we call a bridge loan. So they're interest-only payments, you know, and then that you're using those interest-only payments to keep your costs down while you're stabilizing the building.
Practical Steps
And then we call it, once you go to refinance, it's basically called takeout financing. So this is like your long-term financing, five-year term, either conventional or CMHC to access the equity that you've created in that building.
Exactly. Yeah.
So Jennifer nailed it, guys. So there is the two mortgages.
So keep that in mind, right? Because when you're running your profits, you have to calculate like the fees, the closing costs, all that stuff, and that's going to happen twice.
Key Takeaways
So great, great strategy. And I know Jennifer and Christine, right? Both of you are actively investing in this strategy.
So I really like that. Not only are you talking about it today, but it's literally what you're doing.
So I think that's super important. So what we're going to do for anybody who's listening to this that wants more information or love this idea and wants to move forward with it, we're going to have Jen and Christine's Calendly links into the description there so you can book a call with them and discuss the strategy for your next investment. Did you guys have anything else to add to the strategy or anything else that we should know about? The only thing I was going to add, Scott, is that it's also a piece of it is looking at specific markets where this strategy works really well.
So typically that's like where we're seeing a lot of people doing the strategy is landlord-friendly markets like Alberta, where you can go in and increase those rents. It's a little bit more challenging in other markets where you have a little bit more, you know, rent control and that kind of thing.
Resources
S. as well.
Awesome. Love it.
Yeah, thanks for sharing. So appreciate it, guys. I'm definitely looking forward to next week's topic. I know it's going to be an exciting one and we can't wait to share it with everybody here.
So thanks so much for joining us. Thanks, Scott. Thank you so much for tuning into the show today. If you found value, please follow the show and rate it five stars.
Introduction
It would mean the world to me. And lastly, all the resources that we spoke about are at the bottom of the show notes. Looking forward to seeing you in the next episode.
