With growth comes change.

But Merida Capital Investments is determined to alleviate the growing pains normally associated with such transitions, and focus on the positives.

Why?

With new wealth and a growing middle class, Mexico is a country in need of housing. Approximately six million houses to be precise. Consequently the construction industry is working at maximum capacity.
The Mexican government has instituted an exciting program to help working Mexicans buy new homes. Putting money where their new policies are, the country will match funds that Mexican employees contribute from the Mexican Infonavit program. The new program provides the new home owners with up to 30 years to pay back the loan at a reduced interest rate. This has created a huge demand for housing and a golden opportunity for our investors. The Mexican infonavit program is similar to the Canadian Pension Plan (CPP) where a percentage of an employee’s wages are deducted and sent to the Mexican government monthly. The purpose of this money is to provide Mexicans with a future retirement. In Canada these funds cannot be accessed until age 60 and are paid out monthly until death. They cannot be pulled out in a lump sum.
The Mexican program is slightly different in that the Mexican Government is very aware of the housing shortage in Mexico, and will permit Mexicans to redeem their infonavit funds to use towards a property purchase at any time. This is fueling the demand for housing and creates a demand for additional funding from banks and private funding companies like Merida Capital Investments.

What?

Our company is broken into two components. We have a full service law firm with 5 lawyers www.mcilegalservices.com and our boutique investment company (Merida Capital Investments).

Merida Capital Investments is a boutique investment company. We specialize in financing local Mexicans with real estate purchases, business assets and medical equipment. The Mexican banking system charges 45-60% interest for locals with poor credit or unestablished credit. There are many professionals in the area who make a good living, they have assets but no credit rating and as a result when they apply for bank loans they are quoted fees of 60% annual interest and many other hidden fees. As a result of this many Mexicans do not use the current banking system and do not trust the banks. They may not have a credit card, never had a bank loan and have always paid cash for all purchases. This results in having no credit rating. The banks treat these people as high risk and lump them into the same category as people with bad credit ratings, which results in high interest loans.

The other interesting point is that there are also many Mexicans who have a good credit rating and assets for security and do qualify for lower interest loans from the banks but unfortunately the process can be extremely exhausting and take many months before the funds are ever advanced to the client. We are often able to qualify our applicants in just a 1-2 weeks time and have the funds advanced immediately versus the traditional banking system taking up to 2-6 months. This is often just not acceptable for many of the clients requiring the funds.

Who?

This is who our clients are. We will lend them money at reduced rates but they must provide adequate security and pass our rigorous loan screening process. All of our loan applicants are personally interviewed, employment and wages are confirmed. All assets used for security will be legally screened for liens and ownership; additionally they will be appraised by a qualified third party appraiser. All applicants must satisfy Merida Capital Investments that they do possess the required monthly income to support the monthly loan payment.

If the applicant was hoping to purchase a property for 1,000,000 Mexican pesos, we would require they put in a minimum 500,000 Mexican pesos or equivalent into the purchase and we would finance the purchase. The loan would be registered on title until we have been paid out in full. In the case of a default we would liquidate the property at auction and take possession of any collateral. We have a very low failure rate, as it is very unlikely that someone will walk away from a property that they have 50% equity in or another asset secured against the loan. Our fundamental principle of obtaining a substantial down payment conforms to our prudent lending practices.

If these same principles were used in Canada and the USA, there would be no housing crisis or financial crisis in the North American mortgage market today. The problem with North America today is there are far too many mortgages with 0-10% down, the clients have very little to lose, which results in high default rates.

Financing Examples

We are approached weekly with unique investment opportunities and to illustrate some of the opportunities we come across.

We currently are working on a small retail strip plaza in Playa del Carmen. We have a potential client that owns this strip plaza on 5th avenue, Playa del Carmen. This is prime retail space and very valuable land. The applicant’s plaza consists on 5 units and is valued at about $1,500,000 usd. The plaza is currently rented out 100% with a monthly rental income of $8,500 usd per month in rental income. The property is free and clear of any mortgages or liens. This client is requesting $375,000 to purchase a new building.

This is just one example how we have amble security for our investors. The applicant is prepared to offer up the fully rented strip plaza as security on the $375,000 loan. We will register on title and lend the applicant the $375,000. If the applicant defaults, Merida Capital Investments will have the $1,500,000 property as security. We would have a number of options available to us in the unlikely event of a default..

We were recently approached by another client in Cancun who is requesting $125,000 usd. This applicant owns an advertising company and wants to expand his business. He wants to install large outdoor digital television screens in Cancun and Merida similar idea to Times Square in New York for people to advertise on. He owns a piece of property in Cancun that is undeveloped but in a very good area. It is about one acre in size and is located inside the city of Cancun. The value of the land is approximately $750,000 usd. The property is free and clear of any mortgages or liens. Upon approval of the loan, Merida Capital Investments will register on title as security and advance the applicant the $125,000 usd.

You clearly see we insure that there is always amble security on all of our investments.

These are just a few examples of our investment philosophy which illustrates our prudent lending practices. We do not take any risks and the client must have adequate security to qualify for a loan. If they do not, we simply will not lend out the money. We interview every client and have the property independently appraised. The client must also demonstrate that they do have the income to support the monthly loan payments.

Who Are our Investors?

Most of our investors are foreigners who live 6 months or more in the Yucatan. They understand the culture and realize that our investment strategy is sound and believable. We find that many people who do not understand the Yucatan, think we are investing in palapa houses with dirt floors, they do not realize that this area is very developed with a growing middle class. The investors, who live here, require pesos to live so investing in pesos and being paid in pesos is not an issue. We offer above average returns through a secure investment model.