For many real estate investors in Alberta, the first big milestone is purchasing a 4-plex. It’s the sweet spot, small enough to qualify for residential financing, yet large enough to introduce the realities of multi-family investing. Owning one property with four tenants often feels like a major achievement, but for investors who want to grow wealth, expand cash flow, and build long-term stability, the journey doesn’t end there.
The natural next step is scaling up, moving from a 4-plex to a 10, 15, or even 20-unit apartment building. This leap isn’t just about buying more doors. It’s about shifting into a new mindset, adopting different financing strategies, and learning how to manage properties at a much larger scale.
Below is a step-by-step roadmap to help investors understand how to successfully scale up in the Calgary and Edmonton markets.
Step 1: Mastering the Financing Shift
The biggest difference between owning a 4-plex and a 20-unit apartment is financing.
- Residential Loans (4 units or fewer): These are relatively simple to secure. Approval is based primarily on your income, credit score, and debt-to-income ratio. The process is similar to financing a single-family home, with lower down payment requirements and fewer moving parts.
- Commercial Loans (5+ units): Once you step into the world of mid-sized apartment buildings, financing changes dramatically. Lenders no longer care as much about your salary; they care about the property’s performance. They will look closely at the building’s Net Operating Income (NOI), vacancy rates, and overall cash flow. Expect higher down payments, stricter lending terms, and more due diligence.
This is where CMHC’s MLI Select program comes into play. For properties that meet specific energy efficiency, accessibility, or affordability standards, CMHC offers extended amortizations, reduced interest rates, and higher loan-to-value ratios. For Alberta investors, this program can make mid-sized apartment purchases surprisingly affordable and achievable.
Step 2: Unlocking Equity from Your First Property
A 4-plex is not only a stepping stone into multi-family investing, it’s also a powerful equity-building machine. As property values rise or rental income increases, you can often refinance the property to pull out equity, which then becomes the down payment for your next purchase.
For instance, if you purchased a 4-plex in Calgary for $800,000 and today it’s worth $1 million, refinancing could release between $150,000 to $200,000. That’s enough to kickstart your entry into a 10–12 unit apartment building in Edmonton, where cap rates are still attractive and entry prices remain lower than many other Canadian markets.
This strategy, using one property to leverage the next, is the backbone of real estate wealth building.
Step 3: Preparing for Bigger Management Demands
Managing four units on your own is manageable. You might deal with the occasional late-night repair call, a turnover every year or two, and the usual landlord responsibilities. But once you step into the realm of 20 tenants, the game changes entirely.
Here’s what scaling up means:
- More tenant turnover: With 20 units, vacancies become a regular occurrence. You’ll need systems to market, screen, and onboard tenants efficiently.
- Higher maintenance demands: More units mean more toilets, more appliances, and more potential repairs. Without proper planning, costs and headaches can spiral quickly.
- Greater operational complexity: Bookkeeping, rent collection, legal compliance, and tenant relations all multiply as the unit count grows.
This is why many investors in Calgary and Edmonton turn to professional property management companies. Instead of juggling 20 tenants yourself, a good management team can handle everything, rent collection, tenant screening, and emergency repairs, while you focus on growing your portfolio.
Step 4: The Power of Scaling Up
Here’s where things get exciting. With a 20-unit building, every incremental improvement multiplies across your portfolio.
For example:
- Increasing rent by $50/month per unit = an extra $12,000 per year.
- That $12,000 in new annual income, when capitalized at a 5% cap rate, increases your property’s value by $240,000.
That’s the beauty of scaling: small changes in income create six-figure increases in property value. This “forced appreciation” is why serious investors move beyond 4-plexes into mid-sized apartments.
Final Thoughts
Scaling from a 4-plex to a 20-unit apartment isn’t just about buying a bigger property. It’s about transitioning from being a small landlord to running a professional real estate business.
In Alberta, where housing remains more affordable compared to other Canadian markets and population growth continues to fuel rental demand, this transition is especially promising. Investors who leap can build portfolios that are scalable, resilient, and capable of generating wealth for generations.
For those ready to make the jump, the key is preparation: understand the financing, unlock your equity, delegate management, and embrace the exponential rewards of scaling. In Alberta’s thriving real estate market, the leap from small steps to big gains has never looked more achievable.
