We provide full disclosure of all costs that an investor can expect to bear and accurately model the proforma returns on investment.

Each property that we offer to investors comes with a brochure that shows pictures of its interior and exterior, a detailed description of the property and a summary of the renovations that were performed.

Two full pages of the brochure describe all of the relevant acquisition and debt service financials, rental information, and key financial ratios. The first-year pro forma cash flow projection includes all of the income and expense estimates, including rents, property taxes and insurance, property management expense and debt service, as well as allowances for maintenance and vacancy. From these projections we can accurately predict the first-year cash-on-cash return, the most important cash flow metric for investors.

In addition, we model the acquisition costs, annual cash flow, and sales revenue and sales costs in a 5 year pro forma financial projection to calculate the internal rate of return (IRR) over 5 years. IRR is a metric that comprehends the acquisition costs, the receipt of cash flows over time and the profits made when selling the property, net of all expenses, into a single return on investment figure. It allows investors to more easily compare the performance of different properties that they are evaluating. All of the modeling assumptions used in these calculations are disclosed, including assumptions about maintenance and vacancy expense rates, property and rent appreciation rates, and expense inflation rate.

Our thoroughness, level of disclosure and analysis is uncommon in our industry. In particular, many sellers of investment real estate are notorious for understating or omitting entirely the true costs associated with vacancy and maintenance. This makes the cash flow seem much higher than it truly is. For your convenience, we have provided a useful property analysis tool that can be used to analyze any property or perform a “what if” analysis to see how changes in the modeling assumptions impact return on investment.

This tool performs the same calculations that we use in our brochures, Property Analysis Tool.

Openness and honesty are part of our core values at Meridian Pacific Properties. We provide full-disclosure brochures with the all of the property and financial information that investors need to properly evaluate the performance of our investments so that they can invest with confidence.