The Importance of Taking Action: A First-Hand Account

By Stuart & Denise MacPherson

Divorce is hard on everyone, especially when it leaves you with no real personal net worth, even more so when you are closer to retirement age than school graduation. Couples going through this hardship can have a lot of problems throughout this time, with some of the best divorce attorneys in York as well as other firms, being contacted to help with court proceedings and setting out guidelines. That’s what was facing both Denise and Stuart MacPherson when they first met in the mid-1990s. They were each bouncing back from a divorce and trying to leave debt behind.

By the time they had married in 2003, they had overcome their fiscal deficits and were building a new future but they still didn’t have the lifestyle they wanted. They were both working for the federal government and knew that they were contributing to a solid pension plan. However, they knew that the government pension wouldn’t allow them the lifestyle of travel or luxury care home facilities (in later years) that they desired unless they established another source of income.

After looking at various opportunities, Denise suggested that they consider real estate investing as a way to create income. Denise s parents had owned income properties where she grew up (a small town in northern Ontario), and her brothers continued to own rental properties. Stuart wasn’t so sure. My family background was as a government employee, my father was in the military and my mother was a nurse so I had no real background in owning my own business, and I wasn’t convinced that being a landlord was a good thing, said Stuart. When they had joined their households, Denise had suggested keeping her condo as a rental unit but Stuart was dead-set against the idea. He was deathly afraid of getting the 3:00 AM to call about a plugged toilet, remembers Denise.

A few years later, without making significant advances toward their dream lifestyle, Stuart was now more willing to consider real estate. After one false start with an American-based real estate training company, Denise and Stuart found another training program in 2009 that provided very high-quality training, but at a premium price. This company was based in the United States (I mean, we had no idea that there are so many things to consider – employer and employee rights, the compliances, the workplace retaliation laws – et all) but had hired Canadian investors to re-write the content to be more in line with Canadian laws and practices, said Stuart. We found the training to be very good in specific disciplines but didn’t give us the overall confidence to actually take the steps necessary to begin. Things changed in the spring of 2010.

I was searching online and found a link to sign up for ACRE Live training. I had heard about REIN before but really didn’t know anything about the organization, said Denise. They signed up for the weekend training and were very impressed with the quality of the material and the way it was presented. Even more important though, was the caliber and attitude of the people they met that weekend. We signed up for the information session on Membership and were super impressed by the approach taken by the REIN staff. They wanted to make sure we understood the value of a REIN membership, but there was no high-power sales effort. It was obvious that they were speaking from their hearts, and that they took the best interests of their Members into account. Denise and Stuart signed up on the spot.

By this time, Denise had retired from her government job, but Stuart was still working full-time. They lived in Ottawa so it was a major effort to drive the five hours to get to Toronto for the monthly workshops (and then five hours return), but Denise had made the commitment and was duty-bound to attend as many meetings as possible. Within a few months, they had acquired their first property and learned of new opportunities through their now-growing network of like-minded investors. By the fall of 2010, they had qualified for their Bronze level Property Award Pins and were named as Top Player Award winners for 2010.

During this time, Denise and Stuart also began learning about the special world of private lending. They each had money placed in Registered Retirement Savings Plans (RRSPs) that had been invested in mutual funds. The international financial melt-down of 2008 had significantly decreased the value of their holdings, which had only just started to recover from the dot-com bust of the early 2000 s. Denise had heard about using RRSP funds to make loans secured by mortgages so she learned how to put her RRSPs into action. I was at a meeting of investors and naively asked if any of them might need access to private funds for their investments about 10 hands shot up with everyone trying to get my attention, Denise recalls. I then realized the power of this strategy. After going through the process to lend some of her RRSPs, she and Stuart began to make more mortgage loans using not only their RRSPs, but also their Tax Free Savings Accounts (TFSAs). Once they gained experience in lending funds, they then sought out friends who had underperforming RRSP investments who were willing to lend to Denise and Stuart in order to improve their retirement savings by investing in a secure opportunity. Within a very short time, they had transacted loans involving more than $1.5 million dollars, and they continue to borrow and lend their registered funds this way. After our experiences with the stock market and mutual funds, having our retirement savings invested in real estate just seems to make so much more sense, notes Stuart.

Denise and Stuart learned the importance of building a strong network of like-minded investors that they could work and exchange ideas with. Denise made the trip from Ottawa to Toronto monthly to attend the REIN workshops, sometimes with colleagues, and sometimes alone. Things got easier when Stuart retired from his full-time job in 2012 and was able to travel with Denise to attend the meetings. In addition, they were very active in a local Ottawa investors club, and served terms on the executive. I ended up serving two years as Vice-President of this group that regularly had 150 or more people at their monthly meeting. Through these associations, as well as through other people that they met, Denise and Stuart learned the value of working through Joint Venture agreements as a way to expand their portfolio.

Being avid readers and life-long learners, Denise and Stuart were able to understand alternative strategies to acquire real estate. Having these additional tools available to us positioned us to be able to help more people solve problems. Solving problems is one to the things that drives Denise and Stuart as they build their business. Denise notes, We really enjoy helping other people, whether it is to help someone get into a home while they clean up their credit file, or helping new investors and watching them grow as they learn more about how to improve their financial future. They are regularly approached by other investors for advice and for their opinion, and they are glad to host friends and new investors in their house for a monthly gathering to play a real estate based board game. Having our monthly game night allows us to meet new people, as well as share new concepts while reinforcing basic investing techniques with people just starting in real estate investing, said Stuart. This is just one more way that they see themselves giving back to the community.

The MacPhersons have changed their financial outlook significantly since they started this journey. Denise remembers, soon after she and Stuart were engaged to be married, asking him about his financial outlook. I was really surprised when he told me that he expected to always to make monthly payments to the bank, and never expected to be mortgage free. One of our first financial decisions was to focus on paying off the mortgage on our home. Having a debt-free residence became very useful once they had started to invest in real estate, as it allowed them to establish a Home Equity Line of Credit, and make investments using OPM (Other People s Money) and leverage the equity they had built up in their home.

Looking back, if they could tell their younger selves one thing, it would certainly be to start sooner and not be afraid to take action. I sometimes think about how I wanted to sell Denise s condo when we first got together, and how it would have been paid off by now and nicely cash-flowing, said Stuart, but you can t live with regret you can only learn from your mistakes and keep going.

Denise and Stuart MacPherson are dynamic entrepreneurs, each having over 25 years of leadership experience in management, sales, and marketing. Drawing from their successful careers in the public and private sectors, Denise and Stuart began investing in real estate in 2010. They are active members of the Real Estate Investment Network (REIN) and have both served on the Board of Directors for the Ottawa Real Estate Investors Organization (OREIO). Denise and Stuart are award winning investors and have received a certificate of completion in the Real Estate Investment Advisor (REIA) program offered at The Dragons Den Business School. Over time, they have increased their portfolio significantly, have developed expertise in leveraging unconventional financing options, have engaged in joint ventures with other investment partners, regularly coach other investors to help them achieve success and routinely host a series of group support and networking events for new and experienced real estate investors.

Denise and Stuart reside in Ottawa, Ontario, where they have lived for over 20 years. They remain active members of their community, while pursuing their goal of positively impacting the lives of others using real estate. They are committed to helping people succeed.

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