How to Diversify Out of Ontario as an Investor

By Erwin Szeto | Co-Founder, iWIN Wealth Planning

Recorded: May 2026

Host: Erwin Szeto, Truth About Financial Independence for Canadians

If you’ve been around me for the last couple of years, you’ve heard me talking about diversification. Specifically, diversifying out of Canadian real estate concentration. I’ve been making this case publicly since I met SHARE in 2023. The math in Ontario stopped working for the average passive investor a while ago, and I’ve been saying so.

So this article isn’t another version of that case. You’ve heard it. I’ve made it. Cherry and I have been quietly walking the talk — slowly unwinding our Hamilton rentals as tenants naturally turn over, redeploying that capital methodically. None of that is news.

What I want to spend this article on is the *what next* — the specific places that capital is going, and especially the one strategy I haven’t talked about much publicly until now.

Three threads, briefly: U.S. landlord-friendly real estate (we’ve covered that on the show since 2022). Business acquisition — including the one Cherry quietly pulled off two years ago, which has been a game-changer for our family. And then the third piece, which is where this article wants to spend most of its time: real-estate-style leverage applied to the stock market. Twenty-five percent down. The other 75% borrowed through an institutional investment loan. Same structural math we’ve used in real estate for thirty years — applied to the index instead of a duplex.

If you’ve been quietly wondering whether there’s a way to put your money to work that isn’t another mutual fund and isn’t another Ontario rental — keep reading. This is for you.

Quick Context: Why I’ve Been Saying What I’ve Been Saying

Brief recap, for anyone newer to my work.

I’m not saying real estate is dead in Canada. I’m saying the conditions that made it easy for the average passive investor are gone. Population growth has slowed. Cap rates are compressed. Capital requirements have ballooned. Rent control plus anti-renoviction bylaws plus inflation have squeezed the math to the point where professional property management costs more than the math supports. The infrastructure that made passive Canadian real estate actually passive — particularly the affordable third-party manager — is disappearing.

That’s the death of passive — not in theory, in practice. The infrastructure that made passive Canadian real estate investing actually passive isn’t there anymore.

Active operators are still making it work. People running real estate as a real business — teams, systems, scale, the discipline to handle the LTB. They’ve earned it. I cheer for them. I send them clients. They will be guests on my show.

But for the client who wanted passive — who wanted cash flow without the second job — that option here in Canada has largely closed. So I’ve been pointing them somewhere else.

Where Passive Real Estate Investing Went: South

Passive real estate investing for Canadians didn’t disappear. It moved south.

Landlord-friendly U.S. markets — places where tenant laws aren’t stacked against owners, cap rates pencil, and you can hire institutional-grade property management that handles everything — are where the math now lives. We’ve covered this on the show since 2022, partnered with SHARE in 2023, and it’s been the through-line of the diversification message I’ve been making publicly for two and a half years.

Quick example, in case you’re new. A client of ours just closed on a single-family home in South Carolina. Two-hundred-and-thirty-five thousand U.S. dollars. House built in 1996. Almost 2,400 square feet. Twenty-two-minute drive from the BMW plant that employs 11,000 people. Cap rate? 7.3 percent. Closing? 30 to 60 days.

Try finding that combination in Ontario today. The math doesn’t exist here anymore.

That’s leg one of where Cherry and I are redeploying capital from the Hamilton sell-down. If that’s the part you came for — that’s the part. Now let’s talk about the other things diversification looks like in our actual household, before we get to the strategy this article wants to spend its time on.

ICYMI: We Bought a Business Two Years Ago. It Changed Everything.

Two years ago, Cherry acquired another accounting firm. The previous owners? Two retiring boomers ready to step away from their practice. At the time it was a meaningful capital deployment and a meaningful operational bet. With the benefit of hindsight, it was perfectly timed.

A boring, cash-flowing professional services business — landed right as the Canadian real estate market was decelerating. It became the counterweight to the slowdown. As real estate transaction volume softened across our realtor business at iWIN Real Estate, Cherry’s accounting practice was doing the opposite — quietly compounding, generating recurring cash flow, completely uncorrelated with the housing market.

And here’s the bigger point. Cherry didn’t just acquire a business. She executed the textbook version of what’s about to be the largest small business ownership transfer in Canadian history. Two retiring boomers, no internal succession, a profitable practice that needed a new owner. Cherry stepped in. Buyer wins, sellers win. That exact transaction is going to happen tens of thousands of times across this country over the next decade — and most retail investors aren’t even thinking about it as an investment category.

That’s diversification working the way it’s supposed to.

A boring, cash-flowing business to offset the slowdown of the real estate market. That’s diversification working the way it’s supposed to.

And we’re not alone.

If you’ve been listening to the show, you’ve heard me say this — more and more real estate investors are pivoting into adjacent services. Becoming realtors, mortgage agents, general contractors and accountants. My paralegal friend Andrew switched into HVAC. The pattern is everywhere once you start looking for it: people who built wealth in real estate are moving toward businesses that own the cash flow rather than the property.

Some have tried hospitality — short-term rentals, AirBnB — and got squeezed when municipalities started shutting it down. The boutique operators with proper licensing and unique product are still doing well, but it’s no longer the easy retail-investor play it was five years ago.

The bigger trend behind all of this — the one most retail investors are sleeping on — is exactly what Cherry just did. Boomer business owners are retiring. Many have no transition plan. No kid taking over the shop. No succession. Which means the next generation has an enormous opportunity to acquire profitable, cash-flowing businesses at fair, sometimes generous, prices. And there’s a lifetime capital gains exemption in Canada that makes selling a qualifying business incredibly tax-efficient — meaning sellers are often willing to negotiate creatively. Buyer wins, seller wins.

Boring HVAC company. Landscaping route. Dental practice. Accounting firm. The cash-on-cash returns on these things, when you bought them right, are not in the same league as a duplex in Hamilton. And nobody’s bidding the prices up the way they do on real estate, because most people don’t know how to value or finance a small business.

Cherry and I are living proof of the strategy. It’s one of the pillars the new show is going to spend serious time on.

Now the Piece I Haven’t Talked About Much: 25% Down on the Stock Market

Here’s the part of my personal playbook I haven’t talked about publicly nearly as much as the U.S. real estate or business acquisition pieces — and it’s the one I think is the bigger missing puzzle piece for most of the investors in my audience.

Almost no Canadian retail investor knows this option exists, but you can take real-estate-style leverage and apply it to the stock market. Here’s the structure: a creditworthy Canadian can access a $100,000 investment loan with no money down. Monthly cost of carry is roughly $433 per month. The investment vehicle has principal protection built in. The interest may be tax-deductible. And if you have a spouse with good credit, you can stack a second $100,000 the same way.

In real estate terms, this is a 25% down deal — except there’s no down payment. It’s leverage applied to the broad index, not to a duplex.

If that sounds aggressive, stay with me — because it’s actually the same expected-return math you’ve been doing on Ontario rentals for years. You just haven’t seen it applied this way.

The 2005 framework, applied to 2026

Back in 2005, when I was running my expected-return math on a real estate investment, the standard assumption was 20% down, 80% mortgage, and roughly 3% appreciation per year. Run that math through, factor in the leverage, and your expected return on the cash you actually put in lands around 15% per year. That’s the math that built the Canadian real estate investing industry. The leverage did the work.

Now apply the same framework to the stock market. Twenty-five percent down. Borrow the other 75% through an investment loan. Assume the stock market’s long-run historic average — call it around 10% per year. Run the math the same way. Factor in your cost of carry on the borrowed portion. Expected ROI on your equity? Around 40%.

Now, before anyone yells at me — yes, the past does not predict the future. Yes, leverage cuts both ways. Yes, 10% is an assumption, not a guarantee. We will walk through every loss scenario at the live training.

Even if the stock market only does 6% — way below average — I still get a respectable return on my equity. And I get zero landlord headaches.

That’s the trade. Just a deposit, a wire transfer, and quarterly statements. For the lazy investor — the one protective of their time and mental health — it’s the easiest yes I’ve ever signed.

Why this fits the audience I serve

Most of my clients are over-concentrated in Canadian real estate. They wanted passive. They got an active job they didn’t ask for. They’ve been looking for a way to diversify without dumping properties at the bottom of the cycle.

This strategy was built for that exact person. It’s the second leg of what Cherry and I are doing personally — pulling capital from Ontario as it naturally frees up, and putting some of it into a leveraged equity position that gives us index exposure with the same kind of leverage real estate already taught us to use.

It’s not magic. It’s not a shortcut. It’s just the same math you already understand, applied to a different asset class.

Important Context: This Isn’t My Whole Portfolio

Before anyone takes the wrong message from this article, let me be clear about something.

This isn’t my whole portfolio. Not even close. Cherry and I still hold significant Canadian real estate. We have active businesses generating cash flow. We carry insurance and we have a properly diversified picture across asset classes, income sources, and time horizons. The leveraged stock market position I’m describing is one leg of that. Not the whole table.

And I’m not telling you to put your last dollar into this either. I’m telling you it deserves a seat at the table — alongside whatever else you’re already doing. Diversification is the whole point. Don’t put all your eggs in this basket. Or any basket.

A Quick Note on the Show — and Why This Is Actually Going Back to Roots

If you’ve been listening to my podcast for any length of time, you know it as The Truth About Real Estate Investing for Canadians. Almost five hundred episodes over nearly a decade.

Starting now, the show is becoming The Truth About Financial Independence for Canadians. TAFI for short. Find it at tafipod.ca.

Here’s the thing about this rebrand that I want you to understand. It might look like a departure. It’s actually the opposite. It’s a return to the original idea that started me down this path twenty years ago.

In 2005 I read Rich Dad Poor Dad. Like a lot of you. The whole point of that book — the whole reason it changed how millions of people think about money — was that there is no single path out of the rat race. Real estate is one path. Owning a business is another. Investing in paper assets is another. Kiyosaki was clear about it. Most of us who started with real estate just got so good at it that we forgot the rest of the framework existed.

Like all entrepreneurs, we have to pivot. This change is the show going back to its roots — exiting the rat race the way Kiyosaki actually wrote about. Multiple paths. Not just real estate.

So the rebrand isn’t the show changing direction. It’s the show finally living up to what it was always supposed to be about. Career and income optimization. U.S. real estate. Leveraged stock-market investing. Buying small businesses from retiring boomers. Lifestyle design. Canadian tax strategy. AI as a wealth-creation tool. Multiple paths. Same Rich Dad philosophy.

Like all entrepreneurs, we pivot. This is ours.

Want the Whole $100,000 Strategy Walked Through Live?

This Saturday — May 30, 2026 — I’m hosting a free training called the Zero-Down Wealth Strategy. It’s hybrid: in-person at the iWIN office in Oakville, or join on Zoom from anywhere. Hard start at 9:00am Eastern, hard stop at 10:30am.

In those 90 minutes, I’m walking through:

The complete $100,000 investment loan structure

The math — what $433/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 questions, bring skepticism

In-person seats are capped at 40 people and they always go. If you want to be in the room, register today.

Saturday May 30 — Hybrid (Oakville + Zoom): infinitywealth.ca/20260530

Tuesday June 3 — Zoom only at 8pm Eastern: infinitywealth.ca/20260603

Both events cover the same content. Pick whichever fits your schedule.

The Bottom Line

Canadian real estate isn’t dead. But the conditions that made it a passive vehicle for the average investor are gone. If you want to be an active operator and treat real estate as a business, more power to you. If you want passive, you have to look elsewhere — landlord-friendly U.S. markets, leveraged stock-market positions, small-business acquisition, and a few other paths the show will keep covering.

Diversify. Pacify. Get your time and your peace of mind back.

That’s the next chapter.

To Listen:

On Spotify: https://creators.spotify.com/pod/profile/erwinszeto/episodes/Welcome-to-the-Truth-About-Financial-Independence-e3j379d

Amazon Music: https://music.amazon.ca/podcasts/40fe627d-dec7-4f5d-b7e5-90a550fffe46/episodes/46779809-e913-42b2-8984-b5e0dc7f30d5/the-truth-about-real-estate-investing-for-canadians-welcome-to-the-truth-about-financial-independence

Audible: https://www.audible.ca/podcast/ITEM-NAME/B0GYKNM4JR?source_code=ASSGB149080119000H&share_location=pdp

Apple: https://podcasts.apple.com/ca/podcast/welcome-to-the-truth-about-financial-independence/id1100488294?i=1000766797099

YouTube: https://youtu.be/ibBWxozAre8

You’ve Built Wealth. Now It’s Time to Understand It.

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

Final Thoughts

Whether you’re building wealth, protecting it, or preparing to transition it, you deserve a clear, tax-smart strategy that works in real life.

That’s what iWIN Wealth Planning is here for.

This is how we’re creating predictable, stress-free wealth for Canadian families…
so you can enjoy the life you’re building.

Book your Wealth Planning Call

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.

I’ve Been Telling Investors to Diversify Out of Ontario Since 2023. Here’s What I’m Actually Buying Now