In today’s South Shore real estate market, many homeowners in Chambly, Carignan, and Saint-Basile-le-Grand wonder how to grow their real estate wealth without investing additional savings.
One common question arises: Is it possible to buy a plex without cash, using only the equity built up in your primary residence?
The answer is yes — but under certain conditions.
What Is Home Equity?
Home 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.
💡 Example: If your home is worth $600,000 and your mortgage balance is $350,000, you have $250,000 in equity.
This amount isn’t cash in hand, but it can be used as leverage to finance the purchase of a duplex, triplex, or quadruplex.
Using Equity to Buy a Plex on the South Shore
Financial institutions often allow you to use part of your equity as a down payment on an investment property.
There are two main ways to do this:
1. Mortgage Refinancing
You take out a new mortgage on your current home to withdraw a portion of its equity.
In most cases, you can borrow up to 80% of the property’s market value, minus your remaining balance.
This money can then be used to cover the down payment, closing costs, and even some renovations for your new plex.
2. Home Equity Line of Credit (HELOC)
A more flexible option, a HELOC allows you to borrow against your home’s equity as needed, without fully refinancing your existing mortgage.
This tool is ideal for real estate investments or improvement projects that require financial flexibility.
A Practical Example
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Current home value: $700,000
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Remaining mortgage: $400,000
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Available equity: $300,000
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Maximum borrowable amount (80%): $560,000
→ You could access $160,000 to purchase a plex, cover closing fees, and kickstart your investment journey.
Conditions to Qualify for Financing
Even if you don’t have liquid savings, lenders will still evaluate several key factors:
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Your borrowing capacity (income, debt, 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).
👉 Equity is a powerful financial tool, but it must be backed by a strong financial foundation and a well-defined investment plan.
Advantages of Using Home Equity to Invest
✅ Little to no cash required.
✅ Leverage effect: your current property becomes a growth engine.
✅ Wealth building: rental income helps pay off the mortgage while increasing your real estate portfolio’s value.
✅ Diversification: you own another income-generating asset that builds long-term equity.
Risks to Consider Before Buying a Plex
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Higher total debt: your monthly payments could increase.
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Market fluctuations: property values can drop, reducing your available equity.
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Greater responsibility: managing tenants, maintenance, and potential vacancies.
A personalized financial assessment with an experienced real estate broker like Miguel & Cynthia will help you find the right balance between profitability and security.
In Conclusion
Buying a plex with no cash down, solely by leveraging the equity in your primary home, is an effective and accessible strategy to build long-term wealth.
However, every situation is unique: your income, debts, and the property’s profitability must be carefully analyzed.
➡️ Miguel & Cynthia, real estate brokers in Chambly, Carignan, and Saint-Basile-le-Grand, can help you:
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evaluate your home equity;
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assess your borrowing power;
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and find the ideal plex that matches your financial goals.
Contact us today for a free evaluation and discover how your home can finance your next real estate investment.
