Ex-Zillow CEO launches startup to help people buy second homes

The startup partners with real estate agents to find homes for customers and helps set up an LLC designed for co-ownership. The buyers pay for their share — anywhere from one-eighth to half — and Pacaso pays for the rest, eventually selling the other “shares” to additional owners. It then serves as the owner representative on behalf of the group, handling various logistics such as maintenance, financing, legal, and more. Its platform also lets owners with scheduling and booking.

Pacaso makes money by charging owners a 10% fee at the time of purchase, and from an annual property management fee equal to 1% of the purchase price.

I don’t see anything about how financing / mortgage work? I thought one of the hurdle of investing with others in residential real-estate is around financing.

On their website’s FAQ:

CAN I FINANCE MY PURCHASE?

Yes. We have flexible financing options available to offer our buyers. You also are welcome to use other sources of capital such as home equity financing or cash.

Looks like they have some in-house financing available.

I see this as a great niche. The traditional time-share is mostly scammy roach-motel kind of deals. You can buy but forget about selling. If this startup can make the market more liquid that’s a huge deal.

Sounds like a nightmare. Appreciation profits? I doubt it. Easy to exit? No way Jose.
Sounds like a time share except worse. No transferability. I have been involved in a couple. Not a good idea. One partner maybe. Several fugetaboutit

Invest and vacation separately.

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Totally agree. What a nightmare. These guys are just going to skim all the cream off the top and leave you with a lousy ‘investment.’ One of the beauties of physical real estate as opposed to stocks or RETs is having control, which this would almost completely take away.

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True. It may become like owning one of those franchises like the UPS store, where the franchisee does all the hard work, and a lot of profits are given to the franchisor.