A 72-year-old Vancouver couple sitting on a $1.8M bungalow can transform their 6,200 square foot R1-1 lot into a $5.6M family compound—housing two generations, selling two units to fund the build, and creating $1.7M in net equity. This is the definitive proforma walkthrough for multigenerational multiplex conversion in 2026.
TL;DR (Key Takeaways)
- Starting asset: $1.8M bungalow on 6,200 sf R1-1 lot
- End value: $5.6M four-unit multiplex (VanPlex comp analysis, Q1 2026)
- Total development cost: $2.1M (hard + soft costs)
- Net equity created: $1.7M after all costs
- Family keeps 2 units, sells 2 units to fund the entire build
- Timeline: 18-22 months from permit application to occupancy
- Alternative (sell and downsize): family nets $1.4M—$1.3M less than the multiplex path
The Starting Scenario
Meet the Nguyens (composite scenario based on VanPlex analysis of 86,000+ Vancouver properties). Harold, 72, and Linda, 70, have owned their Dunbar bungalow since 1987. Paid off. Assessed at $1.8M. Their daughter Michelle, 44, rents a three-bedroom in Burnaby for $3,600/month with her husband and two children. The Nguyens want to:
- Stay in the neighborhood they have lived in for 37 years
- Have Michelle’s family nearby (currently a 45-minute commute)
- Reduce their footprint (3,200 sf bungalow is too large)
- Create financial security for retirement and the next generation
The traditional path: sell for $1.8M, buy a condo for $800K, give Michelle $200K for a down payment, invest the remaining $800K. Functional, but limited. The multiplex path creates dramatically different outcomes.
The Lot Analysis
Harold and Linda’s lot characteristics:
| Parameter | Value | Requirement |
|---|---|---|
| Lot size | 6,200 sf (576 m2) | Minimum 5,000 sf for 4 units |
| Zoning | R1-1 | Bill 44 eligible |
| Lot width | 50 feet | Meets minimum 40-foot frontage |
| Lane access | Yes | Simplifies parking, services |
| Current FSR used | 0.52 | New allowable: up to 1.0 |
| Existing structure | 1962 bungalow, end of useful life | Demolish and rebuild optimal |
VanPlex PlexRank score: 82/100—strong candidate for fourplex conversion based on lot geometry, neighborhood comps, and construction feasibility.
The Unit Design Breakdown
The architect designs four units optimized for the family’s needs and market value:
| Unit | Floor | Size (sf) | Configuration | Intended Use |
|---|---|---|---|---|
| Unit A | Ground floor | 1,100 | 2-bed, 2-bath, accessible | Harold & Linda |
| Unit B | Upper floor | 1,400 | 3-bed, 2-bath, family layout | Michelle’s family |
| Unit C | Ground floor | 850 | 2-bed, 1-bath | Sale unit |
| Unit D | Upper floor | 850 | 2-bed, 1-bath | Sale unit |
| Total | 4,200 |
Why This Configuration Works
Harold and Linda’s unit is ground-floor with aging-in-place features: zero-step entry, wider doorways, reinforced bathroom walls for future grab bars. Michelle’s family gets the larger upper unit with direct stair access to a shared backyard. The two sale units are market-optimized at 850 sf—the sweet spot for Vancouver two-bedroom demand (CMHC Rental Market Report, October 2025).
The Complete Proforma
Development Cost Breakdown
| Cost Category | Amount | Notes |
|---|---|---|
| Hard Costs | ||
| Demolition | $38,000 | Includes hazmat abatement (pre-1980 home) |
| Foundation & structure | $380,000 | Full basement, wood-frame above |
| Framing & envelope | $420,000 | 4,200 sf at $100/sf |
| Mechanical (HVAC, plumbing) | $295,000 | 4 separate systems |
| Electrical | $168,000 | 4 panels, EV-ready |
| Interior finishes | $378,000 | $90/sf mid-market spec |
| Exterior & landscaping | $105,000 | Fiber cement, landscaping, fencing |
| Hard cost subtotal | $1,784,000 | $425/sf average |
| Soft Costs | ||
| Architectural design | $75,000 | Full drawings, 3D renderings |
| Structural engineering | $28,000 | |
| Geotechnical report | $8,500 | |
| Building permits & fees | $42,000 | City of Vancouver fee schedule 2026 |
| Development cost levies | $18,000 | Bill 44 reduced levy schedule |
| Legal & survey | $12,000 | |
| Insurance (course of construction) | $14,500 | |
| Soft cost subtotal | $198,000 | |
| Contingency (7%) | $138,740 | Industry standard for known scope |
| TOTAL DEVELOPMENT COST | $2,120,740 |
Revenue and Value Analysis
| Metric | Value | Source/Basis |
|---|---|---|
| Unit A (1,100 sf, ground, family) | $1,250,000 | Comparable sales, Dunbar 2-bed ground units |
| Unit B (1,400 sf, upper, family) | $1,550,000 | Comparable sales, Dunbar 3-bed upper units |
| Unit C (850 sf, sale unit) | $1,150,000 | Comparable sales, new construction 2-bed |
| Unit D (850 sf, sale unit) | $1,150,000 | Comparable sales, new construction 2-bed |
| Total end value | $5,600,000 | Based on VanPlex analysis of 450+ transactions |
| Less: land value (contributed) | ($1,800,000) | |
| Less: development costs | ($2,120,740) | |
| Net equity created | $1,679,260 |
How the Build Gets Funded
This is where the proforma becomes actionable:
- Land equity: $1,800,000 (the Nguyens’ existing bungalow, unencumbered)
- Construction mortgage: $2,120,740 at 6.5% (secured against land; 18-month draw schedule)
- Interest carry during construction: approximately $138,000
- Sale of Units C and D at completion: $2,300,000
- Repay construction mortgage + interest: ($2,258,740)
- Surplus cash after repayment: $41,260
The family ends up with two brand-new units (combined value: $2,800,000), $41,260 in cash, zero mortgage, and $1.7M more equity than they started with. The construction mortgage is fully retired from sale proceeds.
Timeline: Permit to Occupancy
| Phase | Duration | Cumulative |
|---|---|---|
| Design and permit application | 3-4 months | Month 4 |
| Permit review and approval | 4-6 months | Month 10 |
| Demolition | 2-3 weeks | Month 10.5 |
| Construction | 10-12 months | Month 22 |
| Final inspections and occupancy | 2-4 weeks | Month 22.5 |
| Total | 18-22 months |
Vancouver’s multiplex permit processing averaged 6.2 months in Q4 2025 (City of Vancouver Open Data), down from 8.4 months in Q1 2025 as the permitting team scaled up.
The Alternative: Sell and Downsize
What happens if Harold and Linda simply sell the bungalow?
| Factor | Sell & Downsize | Multiplex Conversion |
|---|---|---|
| Sale proceeds | $1,800,000 | N/A (land contributed) |
| Less: realtor commission (3.5%) | ($63,000) | $0 |
| Less: condo purchase | ($850,000) | $0 |
| Less: gift to Michelle (down payment) | ($200,000) | $0 |
| Net investable cash | $687,000 | $41,260 |
| Family real estate equity | $850,000 (condo) | $2,800,000 (2 units) |
| Michelle’s housing cost | $3,600/month rent continues | $0/month (owns unit) |
| Neighborhood continuity | Lost (downsized elsewhere) | Maintained |
| Total family wealth | $1,537,000 | $2,841,260 |
| Difference | +$1,304,260 |
The multiplex path creates $1.3M more in family wealth. Michelle stops paying $43,200/year in rent. Harold and Linda stay in Dunbar. Three problems solved with one project.
Sensitivity Analysis: What If Values Drop?
Conservative investors rightly ask: what if the market softens?
| Scenario | End Value | Equity Created | Still Better Than Selling? |
|---|---|---|---|
| Base case | $5,600,000 | $1,679,260 | Yes, by $1.3M |
| Values drop 10% | $5,040,000 | $1,119,260 | Yes, by $740K |
| Values drop 15% | $4,760,000 | $839,260 | Yes, by $460K |
| Values drop 20% | $4,480,000 | $559,260 | Yes, by $180K |
| Breakeven threshold | $3,920,740 | $0 | Breakeven |
Even in a 20% market decline—a scenario that has not occurred in Vancouver since 2008—the multiplex path outperforms selling by $180K. The strategy has a 30% margin of safety before breakeven.
What Makes This Proforma Realistic
Three factors keep this analysis grounded:
Construction costs are current. The $425/sf hard cost reflects Q1 2026 Vancouver pricing for wood-frame multiplex construction (BC Construction Association cost index). This includes the 3-5% tariff-driven material cost increase observed since early 2025.
Comparable sales are verifiable. The $1,150,000 per 850 sf unit and $1,550,000 per 1,400 sf unit reflect actual closing prices for new-construction multiplex units in West Side Vancouver neighborhoods (VanPlex transaction database, January 2026).
The financing structure is standard. Construction mortgages at 6.5% for owner-occupied multiplex builds are available from multiple Canadian lenders in 2026 (Scotiabank, BMO, First National). The land-as-equity model is well-established for this asset class.
Run Your Own Numbers
Every lot is different. A 5,000 sf lot in Renfrew-Collingwood produces different numbers than a 7,000 sf lot in Kerrisdale. The proforma structure is the same, but inputs vary by neighborhood, lot geometry, and family goals.
Visit vanplex.ca to run a personalized proforma on your property. Enter your address, see your lot’s PlexRank score, and get a development budget estimate calibrated to your specific neighborhood’s construction costs and end values. The analysis takes under two minutes.
Your bungalow might be worth more as four homes than as one.
VanPlex Team
PlexRank™ | Profit with Multiplex
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