Cindy and Taylor's Story

What is your personal/professional background?

I received my BA from University of Michigan in psychology and I continued on to acquire both an MBA and a MS in psychology.  I have worked for others and in business for myself. I was fortunate during the last recession 92-93 in CA to have the opportunity to purchase a childcare center. My business grew to six locations with 200 employees and over $12 million in sales.  When I sold my business in 2006, I was looking for ways to invest for long-term buy and hold cash flow.

Before you contacted Meridian Pacific Properties, what was the problem you were trying to solve?

Even though I made good money on my childcare business, much of that profit was from real estate and development. I had also done some real estate “flipping” with condo conversions in my 20’s. I had enough experience with real estate to know that real estate was the place to invest.  I did not want to start another business with employees right away.  The recession hit right after I sold my business.  I knew it was the perfect time to pick up distressed properties and started to look for opportunities. I just had to find the right people to partner with.

How did you hear about Meridian Pacific Properties?

I did a great deal of research on the internet.  Many companies advertised that they were buying foreclosures in bulk, rehabbing them, and selling them to investors.  I talked to about eight companies and was researching Charlotte, NC.  In that part of the country the homes were reasonable and the property taxes were low (I had considered Texas but ruled it out due to taxes). 

At that point, I found Meridian Pacific Properties. I found it really interesting that they were the only company where the principal members did not live where they invested. They were truly in the Memphis market for the returns.  In fact, though they invested in MS and TN, their headquarters were in San Marcos, CA right near my office!

I spoke to one of their real estate advisors and arranged to go to an in-person presentation. 

Three things struck me at the presentation:

1. The Meridian guys were trustworthy, earnest, and had integrity.  They were good guys who cared about their clients first, and making money second. 
2. They were the only company I researched that offered a one-year rent warranty on their properties.
4. They were the only company that accounted for vacancy and maintenance.  I knew that these were crucial numbers for realistic returns.

What were the key factors in why you invested with Meridian Pacific Properties?

I fell in love with those guys. I’ve worked with a lot of people in my life.  I can read people pretty well.  I could tell these guys had done their homework and were concerned about their clients. We shared similar values. They ran their business like we ran ours.  We assumed if we took care of people and ran a good business, the money would follow.  Much of this I gathered from online, but meeting them face to face was icing on the cake. 

How long did it take you from the time you heard about us to the time you contracted your first home?  Closed your first home?

About two or three months.  My business partner and I both flew out to Memphis to see the available properties.  During that trip, 3-4 other people also flew in from other parts of the country.  The Meridian team spent a lot of time with us.  During our visit, there were 11- 12 houses available.  It’s funny, the house we liked and ended up buying, no one else was interested in. They turned it down flat.   It was a small house, but the rent ratio was great.  So we bought it and it is still my favorite house.  

How is your financial plan different after investing with Meridian?

First, I’m making more money with Meridian than with my other investments.  I’m conservative and my other money is in municipal bonds, or distressed funds, making at most 4-5%.  I generally stay out of the stock market because it is still too risky.  When you think about it, making $200-300 cash flow per house per month, or $2500 back on a $20K investment per year. That’s great.  And that doesn’t include depreciation, or other tax benefits like writing off the closing costs. 

What were some challenges you faced with this investment class?

The process is incredibly easy.  We purchased two houses after our initial visit.  Then I purchased several additional homes at Jeff’s recommendations without flying out.   As of today, I have purchased 17 homes with Meridian. The Meridian team is great at matching specific properties with their clients.

The second time we went to Memphis, I took my 19 year old daughter so she could pick out her first investment property.  I’m trying to bring home the power of investing to her at an early age.  Mike and Jeff spent tons of time with us in Memphis and gave her an investment real estate short course in the car.   They contrasted older neighborhoods with lower taxes, new neighborhoods with shorter re-rental times, and homes that may have better appreciation (I’ll hold forever, but she may want to sell in 2-3 years to buy her own home).  I’m trying to impress upon my daughter the importance of having income from investments.  I tell her that if she wants to buy a house in CA (=liability), she should first acquire cash flow rentals to cover her mortgage payment.

Were there any surprises about investing in this type of product?

1. I am still surprised that people rent in Memphis instead of buying, since they would save so much money buying.  But I guess that is the culture. 
2. With a large portfolio of homes, we have tenants in an out, but we have been pleased that our average tenant stays 18 months. 
3. I can’t believe how inexpensive repairs are in Memphis vs. San Diego.  It’s a totally different market. Repairs are sometimes needed, but the money goes a long way in Memphis for routine maintenance.
4. With a large portfolio of properties, there are always surprises. Most recently, we dealt with a tenant who filed bankruptcy.  When they did, I was glad for the eviction laws in TN that allowed us to get the tenant out and re-rent much faster, and cheaper than in CA. 

What advice would you give to other people considering investing in this type of product?

At first, it may sound too good to be true, as if someone is hoodwinking you.  But Meridian Pacific is the real deal.  Look around and do your research. It is really important to trust the company or get a referral. 

After purchase, the next key piece is having a good property management (PM) company.  With Meridian Pacific Properties, they connect you to the PM and bring their clout.  Everyone has PM horror stories. Meridian helps ensure that the management team on the ground in Memphis is doing their job, since their preferred PMs manage so many clients.

Finally, be sure to hold back at least $50 a month for repairs, especially in year one.  I look at the first year as a way to set aside money, not make money.  This has always worked for me, and works for my daughter.  And with Meridian’s first year rent warranty, it makes it very easy to get comfortable with the process and sent aside funds for the long run.

Would you recommend Meridian Pacific Properties?

Absolutely.  I do all the time.  I love talking to people about working with them.