The 3:1 Investment Loan: How Real Estate Investors Are Building Wealth Without Tenants
By Erwin Szeto | Co-Founder, iWIN Wealth Planning
Recorded: June 2026
Host: Erwin Szeto, The Truth About Financial Independence for Canadians
Guest: Mozzie Chleilat, Account Manager Business Development, DUCA Specialized Lending
Real estate investors understand leverage better than almost anyone. You put 20% down, the bank funds the rest, and you build equity while someone else pays the mortgage. It’s one of the most powerful wealth-building tools ever invented.
But ask most Ontario landlords right now how they feel about the Landlord Tenant Board, and you’ll get a very different answer than you would have gotten in 2015.
Rent control. Anti-renoviction bylaws. Vacancy costs. Property management fees that assume a tenant who actually pays. The passive income promise has become an active management job for most investors, and the economics have shifted enough that many are quietly looking for a different path.
That path exists. It uses the same leverage principle that built wealth in real estate, applied to the stock market instead. No tenants, tribunals and 2 a.m. calls. And as of June 2026, Erwin Szeto sat down with Mozzie Chleilat from DUCA Specialized Lending to explain exactly how it works from the lender’s side.
What Is the 3:1 Investment Loan?
The investment loan is a leveraged lending product designed for investors who want exposure to professionally managed stock funds without putting up the full capital themselves. At DUCA, the structure is called the 3:1 loan: the client funds 25% of the investment as equity, and DUCA loans the remaining 75%.
In practice, it works like this. A client deposits $25,000 into a non-registered Equitable Life segregated fund account. DUCA lends $75,000 against that deposit. The client now has $100,000 invested, and all growth above that $100,000 belongs to them. They service the $75,000 loan at prime plus 0.75%, interest only. If the investment grows and the client wants to exit, they pay DUCA back and keep the rest.
The loan minimum is $50,000, which requires $16,667 of client equity. The maximum within the limited underwriting program is $1,000,000 personal and $1,000,000 corporate, meaning a couple with a holding company could access up to $2,000,000 in combined investment loans without full financial underwriting.
How to Qualify: Significantly Easier Than a Mortgage
The most striking feature of this product, for anyone who has tried to qualify for a new mortgage as a real estate investor, is how simple the approval process is for loans up to $1,000,000.
Within the limited underwriting program, DUCA does not require income documents or financial statements. The approval criteria are a clean credit bureau, no legal suits, judgments, or collection items, and a credit score of at least 650. That’s it. No T4, no NOA, no rental income schedule.
For investors who want above $1,000,000, or who prefer full underwriting, the TDSR maximum is 44%, and DUCA counts 90% of gross rental income toward that calculation. The major banks typically count 50%. For a real estate investor with significant rental income, that difference can be the gap between qualifying and not qualifying.
There is also a net worth qualification pathway. Investors who cannot meet TDSR requirements because of complex income situations, which describes a significant number of long-term real estate investors, can qualify by showing net worth of 1.5 times the loan amount with a reasonable liquid component to service the interest.
DUCA Does Not Report This Loan to Credit Bureaus
DUCA does not report the investment loan as a trade line item on the client’s credit bureau. The loan will appear as a secured item if a lender pulls a very detailed bureau, but it carries no balance history and no payment history. In practical terms, for most future lending scenarios, it does not affect the client’s ability to qualify for additional mortgages.
For a real estate investor still looking to acquire property in Canada or the U.S., this is a meaningful feature. The debt is there, but it is not visible the way a personal loan or car payment would be.
The Soft Margin Breach Program
The most common objection to any leveraged investment strategy is the margin call risk. If the market drops sharply and the portfolio value falls toward or below the loan balance, what happens?
Erwin shared his own experience on this. During COVID, he held AMD shares on margin with a different lender. When the position hit its threshold, there was no phone call and no email. The shares were liquidated overnight without warning. That stock has since gone up roughly 10 times from the price he owned it at.
DUCA’s approach is explicitly different. The program is described internally as a soft margin breach program. At 90 to 95% loan-to-value, DUCA contacts the client to give advance notice that the account is approaching a threshold. If the loan-to-value reaches 100%, the client has 30 days to either add cash to bring the balance back down to 99% loan-to-value, or move to a principal and interest payment for 3 months to pay down the loan. If the market recovers during that window, the breach resolves itself.
DUCA does not call loans. They work with clients through difficult markets, not against them.
The Right Investor Profile
This product is not for everyone. Mozzie is direct about that. The right client has a long-term investment horizon, meaning they are comfortable holding through market volatility without checking the account balance daily. They have sufficient cash flow to service the interest comfortably. They have a high risk tolerance, meaning they understand that leverage magnifies both gains and losses. And they are the kind of investor who sees a market dip as a buying opportunity rather than a reason to sell.
The investor profile that maps almost perfectly to this is a Canadian real estate investor who has used leverage for years and understands the principle intuitively. They already know what it means to put 20% down and let the asset grow. They already know how to sit through corrections. The difference is that this version of leverage has no tenants, no repairs, no legal hearings, and no exposure to Ontario rent control.
The Simple Math
Erwin put the comparison plainly during the conversation. A client can put 25% down in real estate, where the asset has historically grown 5 to 7% per year. Or they can put 25% down in a professionally managed stock fund, where the underlying market has historically grown over 10% per year, net of fees. Both use leverage. Both use the bank’s money. Only one comes with a tenant.
For investors who are already 80 to 90% allocated to Ontario real estate, diversifying into a leveraged stock fund position is not abandoning real estate. It is adding a different kind of asset to the mix, one that is more liquid, more passive, and historically has a higher expected return on equity.
How to Connect with Mozzie and DUCA Specialized Lending
Mozzie Chleilat is an Account Manager Business Development at DUCA Specialized Lending. He can be reached directly at mchleilat@duca.com or by phone at 416-460-0250. His colleagues Michelle Gervais and the broader DUCA Specialized Lending team at duca.com/specializedlending handle investment loan inquiries across Canada.
For investors who want to understand whether this strategy is appropriate for their situation, including whether they qualify and how to structure the 25% equity component, the starting point is a conversation with a licensed advisor who works with this product.
Join Me Live: Free Training on the $100,000 Investment Loan Strategy
I’m hosting a free training on the strategy that produced the returns I mentioned above.
Here is exactly what I will walk through in 90 minutes:
- The complete $100,000 investment loan structure
- The math — what $433 a month actually buys you over 5 and 10 years
- Every loss scenario — what happens when the market drops 20%, 30%, 40%
- How this fits alongside, not replacing, a real estate portfolio
- Live Q&A — bring your questions, bring your skepticism
Register Here: Tuesday July 7, Zoom only — 8:00pm ET
Frequently Asked Questions
What is the minimum investment for a DUCA 3:1 investment loan?
The minimum loan is $50,000, which requires the client to deposit $16,667 of their own equity into the segregated fund account.
Does the DUCA investment loan affect my credit score or mortgage qualifying?
DUCA does not report the loan as a trade line item on the credit bureau. It may appear as a secured item, but it carries no balance or payment history. In most cases, it does not materially affect the ability to qualify for additional mortgages.
What happens if the stock market drops significantly?
DUCA operates a soft margin breach program. If the loan-to-value approaches 100%, DUCA gives the client 30 days notice and options: add cash, make principal and interest payments for 3 months, or wait for the market to recover. DUCA does not call loans.
How does rental income affect qualifying for this loan?
DUCA counts 90% of gross rental income toward the total debt service ratio for loans above $1,000,000. The major banks typically count 50%. This makes a material difference for investors with significant rental income.
Is this strategy right for everyone?
No. This product is designed for investors with a long-term investment horizon, sufficient cash flow to service interest comfortably, a high risk tolerance, and comfort with leverage. Anyone considering this strategy should speak with a licensed advisor to assess suitability.
To Listen
Audible: https://www.audible.ca/pd/B0H7SLPP27?source_code=ASSGB149080119000H&share_location=pdp
You’ve Built Wealth. Now It’s Time to Understand It.
After dozens of consultations, I’ve noticed the same pattern again and again: most investors have built real wealth, but they’re not confident they can retire from it. They’re sitting on $2M–$5M in property but feel cash-flow poor. They’re paying more tax than they should because everything is held in personal names. They have no liquidity, no insurance strategy, and no clear plan for what happens if something happens to them. And almost every single client tells me the same thing: “I don’t actually know what retirement looks like for us.”
Real estate builds equity, but it doesn’t automatically build freedom. Without a coordinated plan for taxes, income, protection, and exit strategy, investors often end up working harder in retirement than they did in their 30s. That’s why I created the Wealth Freedom Blueprint – a simple, practical guide to help you understand where you stand today, what gaps are costing you money, and how to turn the wealth you’ve built into a life you can actually live.
Download your free Wealth Freedom Blueprint
Disclaimer:
As a committed advocate for transparent and responsible investing, I disclose that I am a licensed insurance advisor with Open Concept Financial Group and an advisor working with DUCA Specialized Lending. I earn income when clients engage with the investment loan program described in this post. The investment loan strategies discussed are for educational purposes only and are not a guarantee of approval or performance. Fund performance figures referenced are simulated returns based on the underlying fund’s historical data, adjusted for segregated fund fees, as of May 31, 2026. Past performance does not predict future results. Suitability depends on individual income, cash flow, risk tolerance, and goals. Every investor should do their own due diligence and speak with a licensed advisor before making any investment decisions.
Sponsored by… Me!
This episode isn’t sponsored—except by my wife Cherry and me. Real estate investing is our life. It’s helped us build wealth and achieve peace of mind about retirement and our children’s future.
Till next time—just do it. I believe in you.
Erwin Szeto
W: erwinszeto.com
FB: facebook.com/erwin.szeto
IG: @erwinszeto
Disclaimer
As a committed advocate for transparent and responsible investing, I want to disclose that I am an Advisor to SHARE SFR (Single Family Rental). I hold equity in the company and earn referral commissions from clients I refer.
My endorsement of their model—focusing on positive cash flow and direct ownership—is based on personal experience and belief. Still, every investor should do their own due diligence.
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