Multifamily Real Estate Investing in 2026: Value-Add Deals, Rent Control & Long-Term Wealth

Jeff and Dakota Barker (00:00)
Yeah. And it’s a big discussion that we’re trying to have with investors now. The market has changed. There was a lot of excitement during COVID because values were going up. Like Jeff said it was pretty easy because it was hard to lose when property values are just increasing. I think during that time a lot of investors f kind of forgot the purpose of real estate to me is more of a slow game.

It’s not, you know, we’re not talking big wins, big losses. Real estate is supposed to be your stable, long-term kind of buy it and hold it and get some cash flow from it investment.

Dylan Silver (02:12)
Hey folks, welcome back to the show. Today we’re joined by Jeff and Dakota Barker, the co-founders and owner operators of Opinicon Investments, a real estate investment company focused on acquiring, improving, and managing multifamily properties throughout Ontario, Canada. Their mission is to build wealth with purpose. Jeff and Dakota, thanks for joining us today.

Jeff and Dakota Barker (02:35)
Thank you for having us. No, we’re excited to be here.

Dylan Silver (02:38)
Now you’ve made the transition from residential into multifamily and are now very active in the multifamily space. But walk us through that transition. What were those first deals in the multifamily space like?

Jeff and Dakota Barker (02:55)
The transition really took a big mindset shift for us. We were really in the single-family home space because that’s where we felt investors like us, regular investors, had to live. Close our comfort zone. Yeah. So that’s why we were in the single-family home space originally. And in order to get to the multifamily space, it did take a big mindset shift.

we thought when we did that transition, we would be really wild if we bought maybe a six unit. We thought that would be a crazy transition. And the first property we had under contract was actually 16 units, and the first larger multifamily that we ended up closing on was 24 units. So it was a major mindset shift. But once we had that mindset of people like us are doing these types of deals, it is possible for us.

Really, that’s what we needed, and that’s what set the fire under us to be able to do it.

Dylan Silver (03:59)
Now were those on market deals or did you have to go and find them through, you know, third parties and through word of mouth? How were you able to secure those first couple deals?

Jeff and Dakota Barker (04:09)
The the ones that we were so I guess the one that we closed on, that was actually brought to us off market. It was brought to us off market but by a realtor. So and most of the deals were brought to us by realtors, whether they were on the market, just taken off the market, or about to hit the market.

Dylan Silver (04:26)
There’s a lot of people who are currently active in the multifamily space, syndicators and folks who are seeing an opportunity. But over the last five years, specifically in the States, it’s been challenging for a lot of people because the same strategies that were working pre, let’s say, twenty twenty, twenty twenty one are not still applicable today. What’s been the situation in your neck of the woods in Ontario? Has it been similar? Do you have to pivot from the previous, let’s say, five years?

Pre COVID.

Jeff and Dakota Barker (04:57)
Yeah, it’s definitely it’s definitely different. I feel like we’re in a we’re in an interesting, I guess, phase or part of the cycle where people maybe overpaid during COVID when hey, money was essentially free. People were overpaying for these properties because hey, they cash flow no matter what. And now they’re in this position where there maybe their mortgage is coming up for renewal and

They’re in trouble and they maybe need to sell. So they’re maybe they’re they’re just trying to sell for maybe break-even, which still, from our perspective, might be too much. So it’s definitely a very different landscape right now. Yeah, we’re we’re seeing a lot more creativity required. It’s the the simple

Transactions aren’t as easy to come by. We’re seeing a lot of people trying to sell off market, just trying to not lose their shirt on the transaction. Some people who can’t wrap their head around the fact that they might have to take a loss on their property.

The benefit for us though is that we we understand and have been exposed to a lot of different creative strategies and tools. So now we’re actually able to utilize those tools and discuss them a little bit more with sellers, with I guess a greater chance that they are going to be successful.

Dylan Silver (07:10)
Now you mentioned having these discussions with sellers. So I’m assuming not involved in the development side, but you’re buying pre owned multifamily properties. Is there a specific asset class or a level of distress, if you will, or a ability to value add that you’re looking for when you’re underwriting these deals and looking for acquisitions?

Jeff and Dakota Barker (07:31)
We traditionally have been looking for value add nothing that we like the bones of the property to be good. The ideal, I think, scenario is someone who’s owned the property for a long time. Maybe it’s a, you know, mom and pop type of owner. They’ve loved the building, they’ve owned it for a long time, but maybe they haven’t done a lot as far as rent increases, or maybe not a lot as far as like basic like lipstick renovations.

Those are types of properties that we really like to look for. I don’t think we’ve dove much into like

big structural renovations. but that’s really what we’ve started to focus on more. Interestingly enough, our portfolio right now is actually made up of mostly newer builds, which wasn’t really the plan going into it, but it’s just what when a good deal hits. Yeah. It’s just what has made sense so far. but really what our what we want our next property to be is something with a little bit more value add. not a big renovation, but something that we can

I value over.

Dylan Silver (08:34)
Yeah. If we can get a little granular on the value add portion here, when folks are looking for opportunities, oftentimes it’s in, you know, making it modernized. Is that what y’all are looking to do? Is in adding components that would then have it compete with some of these maybe A class properties?

Jeff and Dakota Barker (08:52)
Yeah, so more of the, as Dakota mentioned, like the lipstick renovations, right? So very cosmetic. And then maybe some efficiencies and like some improvements to the efficiencies, maybe a more high efficiency boiler or something to reduce the expenses. because that’s obviously going to impact the the value of the building as well. Yeah, one of the big things that we don’t really like to do is have to have a property where we have to get rid of all the tenants. That’s not really

We don’t feel good about that. That’s not really something that we like to do. So we like to have properties that the long-term vision is value add. So maybe over the next three to five years as tenants turn over, or maybe we can go and talk to the tenants and say, hey, if we increase your rent, maybe let’s do some rentos in your unit to make it a nicer place to live. That’s more of the way that we like to operate when it comes to our projects. We don’t really like to have properties where we have to force

tenants out of their homes in order to get the value add that we need.

Dylan Silver (09:54)
If we could get a little bit granular on the subject of rents in your neck of the woods, I know it’s gonna be a range, but if we looked at, you know, workforce housing to, you know, A class properties, what’s the the range of rents, let’s say, for a studio or a one bedroom in on in your neck of the woods in Ontario?

Jeff and Dakota Barker (10:47)
It really depend it depends a lot on your market. Ontario is very big province with a lot of very different markets. Where we are looking for a two-bed, for a higher-end unit, like our two bedrooms in the area we are we own right now.

We are getting nineteen to two thousand a month for the two bedroom units. that’s for a higher end. I’d say if you don’t have a newer product, you’re probably gonna be closer to like fifteen to seventeen for a smaller two bed.

Dylan Silver (11:25)
Are there situations that you’ve seen where someone may have a property that they could be charging more foreign rent, but they’ve owned it for so long and they haven’t increased the rents and there’s simply an opportunity based on a change of ownership?

Jeff and Dakota Barker (11:38)
Absolutely. the one thing so in Ontario we have rent control. So that’s the that’s the hardest part to really get around, I guess, for lack of a better way of saying it. is that we’re if if the tenant stays in the unit, you’re limited by how much you can actually increase their rents. So unless you actually turn over the unit, then you end up with with a limit.

Dylan Silver (12:03)
How does that w work? Unpack that a little bit for for our audience who may not be familiar with those regulations.

Jeff and Dakota Barker (12:09)
so in in Ontario you can only increase the rent. I shouldn’t say only.

For the most part, you can only increase the rent up to market when a tenant turns over. So the province sets an amount, like a percentage that you’re able to increase rent every year. And that is your that’s your max. So for example, this year it’s 2.1% is the max that you can increase rent. So you can do once a year rent increases, but you have to follow that rent cap.

there are some exceptions. You can apply to our landlord tenant board to do a larger than rent cap increase. There are also exceptions with newer builds where they don’t fall under rent cap or rent control.

But for the most part, anything that’s older than 2018, that falls under rent control. So that does limit your ability to increase value if your only method is by increasing rents.

Dylan Silver (13:09)
Is there then a a I wouldn’t say incentive, but something similar for a tenants to stay in place because they know that they have a good deal, right? They if they move somewhere else then they could be charged significantly more than where they’re currently staying.

Jeff and Dakota Barker (13:25)
That is the incentive for the tenants, is the is the regulations. Yeah. So by them staying in the unit, they and and them being aware, well, they know that their rent can only be increased by a certain amount every year.

Dylan Silver (13:37)
pivoting here, let’s talk about, you know, finding tenants and managing these properties. So if you’re purchasing these properties, are they typically a hundred percent occupied or very close to it?

Jeff and Dakota Barker (13:48)
Yeah. Yeah. Usually most of the stuff that we look at, maybe there’s one or two units that are vacant or in the middle of

Dylan Silver (13:54)
And so when you’re looking at value add from a standpoint of rent increases, it’s gonna be very much dependent on you know what units are available. And then also too, you might have to get a feel for well, what’s the demographic of our tenants? Are these folks who are planning on staying here long term or are maybe they more transient?

Jeff and Dakota Barker (14:13)
Yeah. Yeah. It it’s important to understand who ’cause if if you have a student rental, that’s gonna be very different than if you have

A unit that is more tailored to families, right? A family with kids is less likely to move around because that’s a lot more work. So you really have to look at the demographics of your building. And again, this is going back to our strategy is you know, you could go in and try cash for keys and try to turn like turn tenants over, but that’s not really something that we like to do because we don’t want our value add to come from purely displacing people out of.

Their homes because a lot of these people, if they’re paying $1,000 a month in rent, market is $2,000. If they get displaced, where are they gonna go? So it that’s not really the strategy that we love doing. That being said, there are other things you can do, and you just have to play within the landlord-tenant rules and understand them so that you know you can get creative and maybe still increase the value without displacing tenants.

Dylan Silver (15:59)
Is there a general sentiment that there is a shortage of workforce or affordable housing up there? and and then also too, are you seeing while there may be a shortage of workforce housing, there’s actually a surplus of we’ll call it class A housing with two gyms and a pool. We see a lot of that down here. What’s it like as far as you know folks who are looking for a new place?

Jeff and Dakota Barker (16:22)
Wanna say it’s I don’t know, I’m I’m gonna say fairly balanced, but it’s there’s still a demand. There’s a lot of demand here for I think any type of housing in general. There are certain pockets that are now throughout Canada and even some pockets in Ontario where there has been a lot of development. So those pockets may be seeing some more vacancy, but in general.

there is a significant demand for housing, I would say. Yeah, I think that the type the the type of property though is like depending on where you go, there’s there’s all sorts of there’s rundown properties that people like those can be affordable, or there’s brand new properties that have been built. Because there’s a lot of incentives for builders to build new as well.

Dylan Silver (17:06)
pivoting here, when you’re looking at an acquisition, you’re looking at your capital stack, what has been your strategy for raising the funds to purchase these properties and you know, has that changed over time as you’ve looked at larger deals?

Jeff and Dakota Barker (17:21)
When we were flipping, we were do like private mortgages. We would have one investor come in and and fund the entire the the entire renovation, but it was a private lender. as we transitioned into the multifamily space, it was more equity partnerships that we were that we were building. So that makes more sense for the type of deals that we’ve been going for. Yeah. I even think the type of

investor and the type of capital partner that we’re working with has changed as well because as you go from a project that maybe needs fifty to a hundred thousand dollars to complete, now you have a building that you’re raising a million, two million dollars, you can’t really bring that same those same investors into that larger property because then you’re you’re bringing on 20, 30, 50 people to do that two million dollar raise. So the type of

person that we’re bringing in has also changed a little bit. But definitely the way we structure deals has changed because with a long-term buy and hold, equity partnership to us makes a lot more sense.

Dylan Silver (18:24)
I’d like to dive in there. You mentioned, you know, time frames, long term buy and hold. We see a lot of folks who are looking for shorter exits. And this has become more and more challenging over time. But you know, pre COVID, you could find a property and it could hit its pro forma in half the time. You could be exiting in two and a half or three years, but of course that’s become more challenging now. So five years, maybe seven years seems to be a consistent time frame. What are you seeing and is there a common hold time for multifamily properties up there?

Jeff and Dakota Barker (18:54)
It’s it’s sort of the same thing. I mean, when the market is just doing this, it’s pretty easy and it’s hard to lose, right? But as I mean, post-COVID, as you start to see fluctuations in interest rates and you start to see the housing markets change, well, so does the the the type of investment that str like the type of investment strategy that you can

implement.

Yeah. And it’s a big discussion that we’re trying to have with investors now. The market has changed. There was a lot of excitement during COVID because values were going up. Like Jeff said it was pretty easy because it was hard to lose when property values are just increasing. I think during that time a lot of investors f kind of forgot the purpose of real estate to me is more of a slow game.

It’s not, you know, we’re not talking big wins, big losses. Real estate is supposed to be your stable, long-term kind of buy it and hold it and get some cash flow from it investment.

And I think we kind of lost that sentiment when everything was going crazy, values were going up a lot. So I having that conversation with investors and going back to the basics of real estate and remembering that this is a long-term game.

It’s not a one to two year traditionally type of project, especially in the multifamily space. So I do think there’s been a bit of a loss of understanding of that because of what happened during COVID. And again, it’s just a mindset shift to get back to the basics of real estate and what it’s truly meant to be. Especially in the multifamily space, because if you want if you want fast, you like in real estate, you’ve got to flip. You’ve got to flip something. You’ve got a wholesale, you’ve got to have an active job.

or get into stocks, get into crypto. If you want to build multifamily real estate is where you do it, but you do it over time.

Dylan Silver (20:46)
Well.

when we talk about the time horizons in general, you mentioned ha you know flipping. It it almost felt like when investors and syndicators were going in and they were hitting these shortened time horizons, it felt like almost a flip of a multifamily property, if you will. Because you’re going in and you you get the capital stack, you purchase a property, you do some value add rehab, and you hold it for like a year and you’re done. Or, you know

that the time that it took to rehab and then the year after you’ve got like, you know, another six months or a year of holding, it almost feels like a flip and you can see the end in in reach. Whereas if you’re looking at a five year, seven year, a longer hold, it’s a totally different conversation. And even when you’re pitching that to equity partners and investors, that’s a different conversation entirely.

Jeff and Dakota Barker (21:39)
Yeah. Absolutely. And there’s a a risk profile to that. And I again I think this is something that we lost during COVID because property values were just increasing just by holding it pretty significantly. but when you’re in kind of a regular market cycle, if you have these short-term turnarounds with capital, typically that comes with a higher risk profile, right? Flipping is a higher risk game. There is higher, quicker reward.

But there is a higher risk to that. And remembering that if you’re doing the long-term buy and hold and you want that reduced risk profile that comes with real estate investing, that means a longer period for return of capital and a longer buy and hold because that’s actually what reduces that risk when it comes to real estate investing. Yeah, I mean, there’s the whole saying around it, right? It’s time in the market, not timing the market.

Dylan Silver (22:36)
Yeah. Yeah. A hundred percent. And there’s a lot of people who think that they can time the market, but you know, that’s how you lose your shirt, especially if you’re doing, you know, multifamily anything, because you know, there’s leverage there and that’s how things can quickly go sideways. We are coming up on time here. Any new projects that you’re working on? And then also anything you’d like to mention directly to our audience.

Jeff and Dakota Barker (22:58)
Right now we are we have we’ve spent a couple of years stabilizing what we like our current pro portfolio. We are now back in acquisition mode. And as we mentioned, we do work with a lot of partners, especially when it comes to equity long-term buy and hold. so we’re always open to conversations if this is something that you would be interested in learning more about, learning more about.

What we do, we’d always love to have that conversation. So make sure you connect with us and we’ll see if it’s a good fit.