Pacaso is turning houses into corporations(npr.org)
npr.org
Pacaso is turning houses into corporations
https://www.npr.org/sections/money/2021/08/24/1030151330/a-unicorn-startup-is-turning-houses-into-corporations
207 コメント
I wonder what the property tax implications are, I guess the 'co-owners' all split it up somehow. I would have thought that even without any laws against timeshares per se that zoning laws would prevent what on paper are 'corporate offices' from being plunked down in residential neighborhoods.
I will say it gave me the idea to turn my own house into a corporation. Or maybe I should go the "my house is actually a church" route. Oh, the possibilities.
Thanks for the tl;dr.
I love NPR, but this click-bait title rubs me the wrong way. Actually the whole article rubs me the wrong way. I wonder if Pacaso paid the writer and this is really just marketing disguised as news. Ugh, NPR, why?
I love NPR, but this click-bait title rubs me the wrong way. Actually the whole article rubs me the wrong way. I wonder if Pacaso paid the writer and this is really just marketing disguised as news. Ugh, NPR, why?
NPR tries too hard to come across as neutral, responsible journalists sometimes. Once in a while I'd like them to just call something bullshit outright. But I guess that's what got us to this age of incivility, so maybe NPR's way is better.
The best way to deal with BS is to not cover it at all. However controversy is a story that sells, so even seemingly neutral journalists will manufacture controversy just to get a story to be neutral about.
You see it in all the vaccines stories that manufactures anti-vax sentiment in various groups.
You see it in all the vaccines stories that manufactures anti-vax sentiment in various groups.
Title of pitch deck: Uber for Timeshares
> Because we live in the dumbest timeline, because they claim to be a tech company and not a timeshare company, this means they are now worth a billion dollars.
Well, we let the taxi service pretend to be not-a-taxi, and get away with it. We let the hotel service pretend to be not-a-hotel, and get away with it.
Since no one is enforcing any reasonable rule of law, it's only a matter of time until 100% of all businesses follow suit. "We're not a hospital, we're a healthcare sharing service". "We're not a restaurant, we're a meal sharing experience". etc.
Well, we let the taxi service pretend to be not-a-taxi, and get away with it. We let the hotel service pretend to be not-a-hotel, and get away with it.
Since no one is enforcing any reasonable rule of law, it's only a matter of time until 100% of all businesses follow suit. "We're not a hospital, we're a healthcare sharing service". "We're not a restaurant, we're a meal sharing experience". etc.
Healthcare sharing is a real thing:
https://en.wikipedia.org/wiki/Health_care_sharing_ministry
https://en.wikipedia.org/wiki/Health_care_sharing_ministry
Which have more exclusions than a Republican health insurance program.
And John Oliver went as far as doing an entire piece on how ridiculous they are, which kind of proves GP's point.
John Oliver is a good comedian, but I don't value his political opinions above those of a Kardashian.
I don't value his political opinions above those of a political scientist, a historian (if they're good btw), but his opinions on politics aren't in the same level as that of a Kardashian, c'mon. You may not agree with him or watch him, but you know it's not the same level.
His fact checking team is rock solid. Not sure I see a lot of political opinion on the show - unless exposing ideology and broken systems through facts and silly references counts.
John Oliver is a popularizer, explaining tough stuff to laypersons. There's a whole team of writers, researchers, fact checkers, lawyers, producers behind him.
If a team like that is wrong about something, it's not for lack of trying to be right.
I've never cared for the format. Just gimme the bullet points, save the snark.
But I've also understood that I'm not the audience. Leaning into civics and current events is a lot of work. And people are busy.
John Oliver, Michael Moore, John Steward, many others, are quite a bit more accessible for a wider audience. So they are a vital part of our public square.
TLDR: John Oliver is awesome.
If a team like that is wrong about something, it's not for lack of trying to be right.
I've never cared for the format. Just gimme the bullet points, save the snark.
But I've also understood that I'm not the audience. Leaning into civics and current events is a lot of work. And people are busy.
John Oliver, Michael Moore, John Steward, many others, are quite a bit more accessible for a wider audience. So they are a vital part of our public square.
TLDR: John Oliver is awesome.
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Does Uber pretend to be not a taxi? At least in the UK, they are just a private taxi company with an app instead of a phone number, and their drivers are licensed taxi drivers.
Yeah, for years and years they were operating in regulated markets where they didn't have any medallions and didn't follow rules and regulations set out on taxis.
Yeah because in many "regulated" markets the market was fixed so that taxis can have limited supply and hence insane prices. In Croatia they changed the law after Uber came to deregulate taxis and it's way better now than it was before while other countries protected the insane taxi mafias
That the laws/regulations were (effectively? intentionally?) rigged to ensure high prices, doesn't at all invalidate the claim that Uber ignored laws/regulations. They are also accused of ignoring more general laws/regulations around worker pay/benefits/health that are not related to regulations specific to taxi services.
The laws were intentionally created to restrict supply of services. Restricted supply = higher prices.
Uber should not have been buying cars for their drivers... but if Uber is to be forced to have employee/employer relationships - then Uber's value of freedom to choose working hours goes out the window, as they now can mandate working hours... and surge capacity is literally annihilated.
Uber should not have been buying cars for their drivers... but if Uber is to be forced to have employee/employer relationships - then Uber's value of freedom to choose working hours goes out the window, as they now can mandate working hours... and surge capacity is literally annihilated.
But that also does not invalidate the claim that Uber ignored laws/regulations, which is what was questioned earlier in the thread.
I'm not (in these posts, I may elsewhere) passing judgement on why they did it and if it were right, only stating that it is what they did.
I'm not (in these posts, I may elsewhere) passing judgement on why they did it and if it were right, only stating that it is what they did.
The same is mostly true in the US.
The US taxi system in most cities was an abusive cartel holding on to a market solely through a government protection racket, and that's the nice description of it. Uber and Lyft destroyed the cartels, delivering a far superior service.
The US taxi system in most cities was an abusive cartel holding on to a market solely through a government protection racket, and that's the nice description of it. Uber and Lyft destroyed the cartels, delivering a far superior service.
This narrative is funny for a couple of reasons. The first being that Taxi companies were never super-profitable nor, generally, did they span multiple metropolitan centres. Uber/Lyft radically centralized Taxi service replacing a supposed "cartel" with a much better capitalized and politically powerful duopoly.
As for the superior service, I'm not sure that will last once the VC funding runs out and these companies have to actually turn a profit. Uber/Lyft is MoviePass writ large.
As for the superior service, I'm not sure that will last once the VC funding runs out and these companies have to actually turn a profit. Uber/Lyft is MoviePass writ large.
Yeah, that worked out great. The Taxis are all out of business and Uber’s magical robot taxis didn’t appear.
So now I pay 3x more to have an experience often shittier than cabs.
So now I pay 3x more to have an experience often shittier than cabs.
Well in Croatia the taxis aren't out of business. They just lowered prices, introduced an app for requesting rides and introduced rating of employees. They also service smaller cities where the volume is too low for Uber to operate so they can keep the higher prices due to low volume.
Uber is never shittier than a cab.
My Uber ride in the cigarette-stained car driven by a woman watching Netflix begs to disagree.
Got out after 2 blocks (a few seconds after she hit “unpause”)
Got out after 2 blocks (a few seconds after she hit “unpause”)
Depends on the city. I still hold high regard for London's cabbies, NY's ones not so much.
"The law was bad, so we did crimes until they changed it."
When you phrase it like that, it actually sounds like a noble protest. Perhaps a tad generous for Uber.
What is civil disobedience.
> ... didn't follow rules and regulations set out on taxis.
And were hailed as "disruptors."
And were hailed as "disruptors."
Because they are...
Have you ever had to haggle about the cost of your trip with a taxi driver?
Have you ever ordered a taxi and one never showed up?
Have you ever missed your flight, because a taxi - that was scheduled to pick you up at 5AM just didn't arrive?
I used to do consulting work all over Europe and literally spent 5 years of my life flying every single week. Pre-Uber taxis were horrible! In fact, they still are!
Have you ever had to haggle about the cost of your trip with a taxi driver?
Have you ever ordered a taxi and one never showed up?
Have you ever missed your flight, because a taxi - that was scheduled to pick you up at 5AM just didn't arrive?
I used to do consulting work all over Europe and literally spent 5 years of my life flying every single week. Pre-Uber taxis were horrible! In fact, they still are!
Also having the taxi driver intentionally taking indirect routes to run up the meter. Crazy how much better rideshares serve there customers just by setting the rate before you get in the car
Not to mention taxis refusing to serve minority neighborhoods. If you're actively preventing a significant proportion of your potential customers from using your service, you shouldn't be surprised if a competitor is able to swoop in and "disrupt" your business. (that's not to say Uber doesn't have their own problems with rideshare redlining, but they're certainly better than traditional taxi companies)
Not to mention taxis refusing to serve minority neighborhoods. If you're actively preventing a significant proportion of your potential customers from using your service, you shouldn't be surprised if a competitor is able to swoop in and "disrupt" your business. (that's not to say Uber doesn't have their own problems with rideshare redlining, but they're certainly better than traditional taxi companies)
I got on a taxi at a taxi stop (in my country there are designated spots where only the registered cabs for each specific spot can park) and the driver was speeding, hitting all the bumps on the road, zig-zagging, etc. My wife and our baby was in the car with me. I complained, didn't work, then I went back to the stop a couple of days later and complained to the other drivers of said spot. They all said they constantly received complaints for that guy, but since he was "one of the oldest drivers here, can't do nothing about it".
These stories is literally the reason why I will fight for Uber/Lyft at this time.
In many countries the market is regulated, but the regulations are pretty slim (requiring commercial insurance and the driver to be completely sober).
Yes, in many (most?) cities in the US, you need a special license to spontaneously pick up passengers (e.g. when you wave a taxi over to come pick you up). However, town-car services, where you pre-arrange to be taken somewhere ahead of time operate under looser rules. Uber's loophole was making an app so you technically prearranged to be picked up a few minutes before you were picked up.
Can't speak for the US, but in a UK city it wasn't exactly difficult to get the equivalent by ringing up at short notice (or indeed get one straight away by turning up at their city centre office, or spotting one illegally touting for business on the streets at pub closing time). Often they were cheap too. Even a phoneline which became an app attempting to aggregate the firms existed (I knew the guy who ran it... which is probably why I knew it existed!). All Uber brought to the party was VC money, the social expectation to award every driver 5 out of 5 and more aggressive surge pricing
Continue the erosion of laws and regulations in the name of tech. I wonder what the world will look like in twenty years.
It exists, it's called Zoomcare
[deleted]
Uber provides a different service than a taxi.
Airbnb provides a different service than a hotel.
Both of these narrowly scoped, heavily regulated antiquated services were failing to meet the needs of most, and the world is better that there are additional options.
Taxis and hotels are still there and still sucking, if you prefer those.
Airbnb provides a different service than a hotel.
Both of these narrowly scoped, heavily regulated antiquated services were failing to meet the needs of most, and the world is better that there are additional options.
Taxis and hotels are still there and still sucking, if you prefer those.
What is wrong with hotels (and B&Bs, etc.)? I stayed in them maybe 100 nights per year pre-pandemic and they're mostly fine.
They are very lucrative, so landlords take apartments off the market to turn them into AirBnBs. This raises rent prices in touristic areas.
Beyond that, it means you might have loud neighbours you can't control or a constant traffic of visitors in your building. They are not regulated like hotels, nor taxed like them.
Beyond that, it means you might have loud neighbours you can't control or a constant traffic of visitors in your building. They are not regulated like hotels, nor taxed like them.
There was a time when airbnb was mostly unique, quirky, and in places like NYC, vastly below market rate. Now, the only benefit that I see is the "rental cottage" style for vacations where you're willing to pay a premium for staying in a detached home with a reasonably equipped kitchen.
I never pulled the trigger but last fall I was thinking of going up to New Hampshire for a week but was only going to do so if I could avoid dealing with restaurants so I looked at AirBnBs.
It's not that I always stay in a chain hotel either. Outside of metros, I'll definitely give B&Bs and Inns a look.
It's not that I always stay in a chain hotel either. Outside of metros, I'll definitely give B&Bs and Inns a look.
I've always found them great for weddings/reunions with groups of 4-6 renting a small house, which usually ends up being much better value for the price than hotel rooms and suites, and much more convenient than traditional house rentals.
Hotels are commercial property, in commercial districts.
Staying in residential property, in residential districts is way preferable to me for my style of travel (3-6 weeks in a city at a time).
Staying in residential property, in residential districts is way preferable to me for my style of travel (3-6 weeks in a city at a time).
The business model doesn't seem honest. I doubt they really want to buy 3M homes and sell that to 6 people at 500k each. There isn't much of a market for that.
More likely they want to find a way to circumvent short term rental laws and then charge a premium over Airbnb for short term rental access in locations that Airbnb cannot rent. On paper that company could be worth billions. Then they sell it before investors realize the legal tricks they used only work for a short while.
More likely they want to find a way to circumvent short term rental laws and then charge a premium over Airbnb for short term rental access in locations that Airbnb cannot rent. On paper that company could be worth billions. Then they sell it before investors realize the legal tricks they used only work for a short while.
The "homeowners can 'gift' stays to 'friends and family'" [second scare quotes added] quote in the middle, plus the app to organize bookings hints at the direction they're going to take this. You're not buying a very expensive timeshare, you're buying a 1/8th share in a revenue-generating asset. These aren't paying guests, they're friends of the owners who have been gifted a stay.
Turns out, though, that a neighborhood of (by definition) multi-millionaires can mount a more effective defense than the markets airbnb started in.
Turns out, though, that a neighborhood of (by definition) multi-millionaires can mount a more effective defense than the markets airbnb started in.
> app to organize bookings hints at the direction they're going to take this
Can you elaborate why the app hints at this?
Can you elaborate why the app hints at this?
It’s definitely no substitute for AirBnB. They’re buying houses worth millions and assisting groups of people to buy them together. The truth is that most people don’t spend that much time in their second home, so a 1/4 or 1/8 share is likely more than enough.
In Whistler, BC, such fractional ownership is common. And it’s true ownership on title, rather than a form of rental like a time share.
In Whistler, BC, such fractional ownership is common. And it’s true ownership on title, rather than a form of rental like a time share.
But you don't buy a second home to timeshare it... you buy it so it's yours, filled with your stuff when you come there and always accessible.
500K for basically an airbnb, where i have to pack all my stuff, to go there for a week, then pack stuff, to go home is pretty useless to me.
500K for basically an airbnb, where i have to pack all my stuff, to go there for a week, then pack stuff, to go home is pretty useless to me.
There is a huge market for this.
People have been doing informal versions of this for a long time.
ie, a well off family will have a second home, but it's actually shared between 6 families in the family (second generation) who use it in various ways. Grandparents go up, kids visit with grandkids, then kids and grandkids stay etc.
Boats are often bought in a partnership - and frankly it's more fun becuase your budget for ownership is literally 4x - so you can do / pay for whatever, cleaning, maintenance etc.
Various forms of fractional aircraft ownership.
Folks with money are not total idiots. A fixed asset sitting is a waste.
In the house case, you want a place that becomes a regular part of your routine, a place your kids know, a place your friends start to know. 1/4 ownership is not 1 week a year. It is months in the year. You know the local restaurants, the hikes and bike rides etc.
I've independently been sent hey, look at this place, from two different people now who are on this app. You can get a MUCH nicer place than you can get alone for $400K. A place you could have a big group over to visit etc, a place for families to get together.
People have been doing informal versions of this for a long time.
ie, a well off family will have a second home, but it's actually shared between 6 families in the family (second generation) who use it in various ways. Grandparents go up, kids visit with grandkids, then kids and grandkids stay etc.
Boats are often bought in a partnership - and frankly it's more fun becuase your budget for ownership is literally 4x - so you can do / pay for whatever, cleaning, maintenance etc.
Various forms of fractional aircraft ownership.
Folks with money are not total idiots. A fixed asset sitting is a waste.
In the house case, you want a place that becomes a regular part of your routine, a place your kids know, a place your friends start to know. 1/4 ownership is not 1 week a year. It is months in the year. You know the local restaurants, the hikes and bike rides etc.
I've independently been sent hey, look at this place, from two different people now who are on this app. You can get a MUCH nicer place than you can get alone for $400K. A place you could have a big group over to visit etc, a place for families to get together.
> You can get a MUCH nicer place than you can get alone for $400K
You can also get a very nice place for 44 days in a year (the offer discussed in the article is 44 days, no more than 14 consecutively, first come first serve for timeslots) for $4k on a vacation rental site, have approximately as much say in how it's run, and have more choice over which days you spend there, and whether you spend more time there next year or not. Of course, you don't get a theoretical opportunity to sell appreciating property on at a profit which I'm sure the Pacaso sales team talks about a lot, but how real is that opportunity when most property investors and wealthy homebuyers are looking for whole houses, not a timeshare (and people who want timeshares are going to Pacaso.com to buy the new properties it takes a ~14% fee to subdivide and sell, not whoever's willing to shift the share you want rid of)
Sure, there's a real market for it, but there's a real market for other types of timeshare that sound like better (or less worse) deals...
You can also get a very nice place for 44 days in a year (the offer discussed in the article is 44 days, no more than 14 consecutively, first come first serve for timeslots) for $4k on a vacation rental site, have approximately as much say in how it's run, and have more choice over which days you spend there, and whether you spend more time there next year or not. Of course, you don't get a theoretical opportunity to sell appreciating property on at a profit which I'm sure the Pacaso sales team talks about a lot, but how real is that opportunity when most property investors and wealthy homebuyers are looking for whole houses, not a timeshare (and people who want timeshares are going to Pacaso.com to buy the new properties it takes a ~14% fee to subdivide and sell, not whoever's willing to shift the share you want rid of)
Sure, there's a real market for it, but there's a real market for other types of timeshare that sound like better (or less worse) deals...
The generational house is probably different from something like this though. Even if all the second cousins don't necessarily really know each other, a lot of the owners will have grown up going to the house starting as kids. And, as you say, families will get together etc. That seems a rather different situation from buying a luxury timeshare with strangers.
You don't always hang with family, but you get a part time use of a house that is a consistent place - that really is very nice and I think a lot of folks laughing at this idea do not understand either the market or attraction in what they are offering.
Do you pay $3M or $500K. That is the question you need to ask. Is it worth $2.5M to have more than your standard locker of crap at the vacation house?
Even family houses - generally you need to keep your personal crap to a minimum, everything is shared. You can buy a bogie board for everyone, but the folks on here talking about how they need to fill a $3M 6 bedroom house with their personal crap - this is not for you. Most of us can get buy much more simply.
This is why I'm glad we can let market decide not folks on HN. Almost every neat thing, from iphone to this would just be poo poo'ed away.
Do you pay $3M or $500K. That is the question you need to ask. Is it worth $2.5M to have more than your standard locker of crap at the vacation house?
Even family houses - generally you need to keep your personal crap to a minimum, everything is shared. You can buy a bogie board for everyone, but the folks on here talking about how they need to fill a $3M 6 bedroom house with their personal crap - this is not for you. Most of us can get buy much more simply.
This is why I'm glad we can let market decide not folks on HN. Almost every neat thing, from iphone to this would just be poo poo'ed away.
>$3M or $500K
Alternatively, renting or staying in a hotel/resort is _significantly_ cheaper than $500k, even amortized over 10 years. TBD how much you can sell your timeshare back for at the end, but I'd argue the risk + the significant upfront capital + not getting to put your crap in your expensive rental™ makes it a tough sell for all but a small niche.
>let market decide not folks on HN
I'd point out that a number of the threads on this are more upset that this seems to be a timeshare system that dodges regulations around timeshares, just as Uber is a cab system that dodges cab regulations and AirBnB is a BnB/home rental. It's more anger that these startups raise massive cash to distort the markets in ways that have some advantages but aren't always long-term positive, and it takes regulation too long to catch up. Comparing regulation dodging timeshares to iPhones feels disingenuous.
Alternatively, renting or staying in a hotel/resort is _significantly_ cheaper than $500k, even amortized over 10 years. TBD how much you can sell your timeshare back for at the end, but I'd argue the risk + the significant upfront capital + not getting to put your crap in your expensive rental™ makes it a tough sell for all but a small niche.
>let market decide not folks on HN
I'd point out that a number of the threads on this are more upset that this seems to be a timeshare system that dodges regulations around timeshares, just as Uber is a cab system that dodges cab regulations and AirBnB is a BnB/home rental. It's more anger that these startups raise massive cash to distort the markets in ways that have some advantages but aren't always long-term positive, and it takes regulation too long to catch up. Comparing regulation dodging timeshares to iPhones feels disingenuous.
There's definitely the principle of the regulation dodging. That said, aside from the existence of a matchmaking company, I'm willing to bet that the legal structures around a large shared extended family home probably doesn't look a lot different.
Yep, with family, you can live your stuff there... clothes, fishing poles, boat, even your toothbrush, and not be afraid, someone will do something really wrong with it.
Even if that's probably a somewhat idealistic view of many large extended families :-), there is shared context and history which makes it at least feel different.
If you own it, you can keep a few sets of cargo shorts there and some at home. That is the nice part of multi-home living. A boy can dream....
That writeup gives really strong WeWork vibes. Guess we know where this is heading...
heh, great summary, thank you.
I appreciate that on mobile the line wrapping of your comment text resulted in:
There's a new startup called Pacaso selling
timeshares. Like most people who sell
timeshares, they loudly claim they aren't
timeshares at all. Unlike most people who sell
timeshares, they also ignore all laws against
timeshares.
There's a new startup called Pacaso selling
timeshares. Like most people who sell
timeshares, they loudly claim they aren't
timeshares at all. Unlike most people who sell
timeshares, they also ignore all laws against
timeshares.
Ugh, I'm trying not to be cynical, but:
> There's a new startup (...) selling $Thing. (...) Unlike most people who sell $Thing, they also ignore all laws against $Thing. Because we live in the dumbest timeline, because they claim to be a tech company and not a $Thing company, this means they are now worth a billion dollars.
It's becoming a kind of a recurring pattern.
> There's a new startup (...) selling $Thing. (...) Unlike most people who sell $Thing, they also ignore all laws against $Thing. Because we live in the dumbest timeline, because they claim to be a tech company and not a $Thing company, this means they are now worth a billion dollars.
It's becoming a kind of a recurring pattern.
Makes me want to lose my scruples, figure out the next $Thing, get fantastically wealthy from it, and retire.
Pick some laws and regulations and find a way to ignore them at scale
I can actually see this not really being timeshares. I'd like to see statistics on how frequently the fractional owners actually bother to occupy the houses during their allotted time at all. This feels more like an attempt to allow people to speculate in an overheated housing market in neighborhoods well above their price range, expanding the buyer pool for luxury housing beyond the small number of people who can actually afford luxury housing.
That, of course, has the potential to be much worse than timeshares. Instead of just being a stupid purchase locking people into a single vacation destination at a single time every year, it dumps more money into a real estate bubble that is eventually going to pop again. But this time, instead of roping pension funds into buying fractional shares of a mortgage, it's just roping individuals who won't get bailouts when this all comes crashing down and the founders are laughing their asses off on an island wiping their asses with $100 bills.
Get in fast and get out, I guess, because a whole lot of sorry fools are going to be left holding bags of worthless rocks when the Fed raises interest rates by 0.5% and the free mortgage frenzy market panics when we find out how many people can really afford even 1/8 of a mansion.
That, of course, has the potential to be much worse than timeshares. Instead of just being a stupid purchase locking people into a single vacation destination at a single time every year, it dumps more money into a real estate bubble that is eventually going to pop again. But this time, instead of roping pension funds into buying fractional shares of a mortgage, it's just roping individuals who won't get bailouts when this all comes crashing down and the founders are laughing their asses off on an island wiping their asses with $100 bills.
Get in fast and get out, I guess, because a whole lot of sorry fools are going to be left holding bags of worthless rocks when the Fed raises interest rates by 0.5% and the free mortgage frenzy market panics when we find out how many people can really afford even 1/8 of a mansion.
The thought occurred to me but if I were going to dump $600K into real estate I don't think I'd do it in a house with a doubtless expensive management company in a somewhat unusual very high end fractional ownership scheme that would seem to make value rather speculative versus a regular purchase.
Ugh, this activates visceral dislike in me. I dislike the corporation ignoring local laws and ordinances, I dislike the extremely wealthy neighbors throwing up tons of signs around the now poorer peoples' domicile in their perfect community, and I dislike the potential for 8 people to get screwed by a bubble.
Lastly, is it wasteful that people pay 600k for a month and a half of luxury housing per year? To me, That's so exorbitant. I worry that humans are constantly chasing a bigger better lifestyle, neglecting sitting down and noticing how great their actual life already is.
Lastly, is it wasteful that people pay 600k for a month and a half of luxury housing per year? To me, That's so exorbitant. I worry that humans are constantly chasing a bigger better lifestyle, neglecting sitting down and noticing how great their actual life already is.
> I worry that humans are constantly chasing a bigger better lifestyle, neglecting sitting down and noticing how great their actual life already is.
There is certainly a "keeping up with the joneses" aspect to this particular issue, but thank god people still wanted bigger and better for the last century or else most homes wouldn't have electricity and running water and countless other modern luxuries we take for granted.
There is certainly a "keeping up with the joneses" aspect to this particular issue, but thank god people still wanted bigger and better for the last century or else most homes wouldn't have electricity and running water and countless other modern luxuries we take for granted.
> "Unlike a timeshare model, the co-owners that Pacaso serves collectively own real estate, not time,"
… well that actually seems like a somewhat interesting business mod—
> If you buy a share in a house, you're able to stay in it 44 nights per year in increments that can't exceed 14 consecutive days per visit.
Oh, hmmm, it’s not a timeshare, it’s something completely different that they just invented. Fascinating!
… well that actually seems like a somewhat interesting business mod—
> If you buy a share in a house, you're able to stay in it 44 nights per year in increments that can't exceed 14 consecutive days per visit.
Oh, hmmm, it’s not a timeshare, it’s something completely different that they just invented. Fascinating!
> well that actually seems like a somewhat interesting business mod—
That's not a new idea either.
https://en.wikipedia.org/wiki/Real_estate_investment_trust
That's not a new idea either.
https://en.wikipedia.org/wiki/Real_estate_investment_trust
I live near and visit Aspen often. Many of their properties are occupied as little as a month a year- a period around July 4 and another around News Years. Their uber-wealthy owners have no great interest in monetizing the unused 90% of the time.
Buying one of 6 town houses (aka "row houses") constructed by razing an existing SFR is like Space-Division Multiplexing.
Buying into one of these "1/8 ownership" deals sounds like Time-Division Multiplexing... aka a time-share.
Buying into one of these "1/8 ownership" deals sounds like Time-Division Multiplexing... aka a time-share.
I checked the listings and one of them is in La Quinta, CA. Should be interesting if the residents there put up a fight like those in Napa. "We aren't that La Quinta!" (Large hotel chain in the US.)
The "haha, this really is timeshare" comments on this and on https://news.ycombinator.com/item?id=28247379 are missing the point. Let me tell you why, with an example from a niche I've been involved in for 25 years; the 250-year old inland waterways of the UK.
Shared ownership is big business on the UK canals. A new narrowboat costs £100k+, and unless you're living afloat, most people only spend a few weeks on it every year. It makes a lot of sense, then, to share with other like-minded people: you get the same amount of holiday for a fraction of the cost.
Traditional timeshare narrowboats exist too. But the model is very different, and much more like the "timeshare" you'd think of with villas/resorts/etc. You pay some sort of upfront cost and some sort of subscription to the timeshare company, in return for which they promise to give you some benefits. But with timeshare, it's all a contractual relationship with the timeshare company; you don't own any part of the boat, and if they go bankrupt, you're screwed.
That's not what narrowboat shared ownership is. With shared ownership, you literally do own a 1/12th share of the boat. Once you and your fellow co-owners have bought it, the boat belongs entirely to you. You probably pay some sort of service charge to the company for co-ordinating bookings (arguments over school holidays are common), servicing, and so on. But the boat is yours.
And this was proved c. 2008.
The two biggest shared ownership companies, OwnerShips and Challenger Syndicateships, both went bust in short order. Both had over-expanded: forays into the French canal market, ambitious luxury boats which went over budget, and just plain avarice on the part of the founders.
But in both cases, the boat sharers retained ownership of their boats. Some incidental service fees and associated funds held by the companies were lost, but the asset remained untouched. Those boats are still out there, still in shared ownership, and often with service/arrangement fees being paid to another company - because since you own the boat, you can just up sticks and deal with another company if you like, or none at all.
Contrast with timeshare. If a timeshare company goes bust you have no recourse. You don't own the boat/apartment/whatever. You don't own anything.
So please, less of the "this is just reinventing timeshare". It's a proven model, it works, and good luck to them.
Edit: a couple of examples: https://www.bcbm.co.uk, http://www.carefreecruising.com.
Shared ownership is big business on the UK canals. A new narrowboat costs £100k+, and unless you're living afloat, most people only spend a few weeks on it every year. It makes a lot of sense, then, to share with other like-minded people: you get the same amount of holiday for a fraction of the cost.
Traditional timeshare narrowboats exist too. But the model is very different, and much more like the "timeshare" you'd think of with villas/resorts/etc. You pay some sort of upfront cost and some sort of subscription to the timeshare company, in return for which they promise to give you some benefits. But with timeshare, it's all a contractual relationship with the timeshare company; you don't own any part of the boat, and if they go bankrupt, you're screwed.
That's not what narrowboat shared ownership is. With shared ownership, you literally do own a 1/12th share of the boat. Once you and your fellow co-owners have bought it, the boat belongs entirely to you. You probably pay some sort of service charge to the company for co-ordinating bookings (arguments over school holidays are common), servicing, and so on. But the boat is yours.
And this was proved c. 2008.
The two biggest shared ownership companies, OwnerShips and Challenger Syndicateships, both went bust in short order. Both had over-expanded: forays into the French canal market, ambitious luxury boats which went over budget, and just plain avarice on the part of the founders.
But in both cases, the boat sharers retained ownership of their boats. Some incidental service fees and associated funds held by the companies were lost, but the asset remained untouched. Those boats are still out there, still in shared ownership, and often with service/arrangement fees being paid to another company - because since you own the boat, you can just up sticks and deal with another company if you like, or none at all.
Contrast with timeshare. If a timeshare company goes bust you have no recourse. You don't own the boat/apartment/whatever. You don't own anything.
So please, less of the "this is just reinventing timeshare". It's a proven model, it works, and good luck to them.
Edit: a couple of examples: https://www.bcbm.co.uk, http://www.carefreecruising.com.
I don't think anyone is really objecting to the concept that you could share ownership of a holiday place and share the ability to use it. That's not the problem with timeshares. The problem with Timeshares is that there is basically only 1 way for timeshare companies to make more money on proprety they've already sold - and that's to increase the maintenance costs until the property is basically worthless, and that is generally what happens. My aunt got a timeshare left to her in someone's will. The maintenance fees for the timeshare (a villa in Portugal) are - funnily enough - more expensive than booking 2 weeks in a villa in portugal. Does she technically own anything? Yes, she owns a liability that she can't get rid of.
It's a proven model for non-essential items that people don't use all the time.
Which housing isn't. Hence why there's the community outrage and legal wrangling.
Which housing isn't. Hence why there's the community outrage and legal wrangling.
TFA talks about "the dream of second home ownership". That's what this is. Second homes aren't essential.
Now there's a strong argument that second home ownership should be restricted in some places, but that's orthogonal to whether the house is under shared or single ownership.
Now there's a strong argument that second home ownership should be restricted in some places, but that's orthogonal to whether the house is under shared or single ownership.
Of course second homes aren't essential.
But purchasing a second home still makes it a home; you'll still live in it some part of the year.
This article is about rotating out who is living in it, making it no different than short term rentals or timeshares from the community perspective, and that's what I'm referring to. People don't want homes being owned and operated as rental businesses in their neighborhoods; they want people living in their neighborhoods. As evidenced by the exclusion zones, HOAs, etc, mentioned in the article. This is an attempt to circumvent those. So, fundamentally different than partial ownership of a boat as compared to a rental of a boat; no one is objecting to renting a boat on the UK canals.
But purchasing a second home still makes it a home; you'll still live in it some part of the year.
This article is about rotating out who is living in it, making it no different than short term rentals or timeshares from the community perspective, and that's what I'm referring to. People don't want homes being owned and operated as rental businesses in their neighborhoods; they want people living in their neighborhoods. As evidenced by the exclusion zones, HOAs, etc, mentioned in the article. This is an attempt to circumvent those. So, fundamentally different than partial ownership of a boat as compared to a rental of a boat; no one is objecting to renting a boat on the UK canals.
It's easy to be critical of this and I certainly wouldn't be interested even if I had the money. But, in all fairness, a house with 8-way split ownership doesn't really look much different from a neighborhood perspective than a family property that's now owned by an extended family of descendants.
> So, fundamentally different than partial ownership of a boat as compared to a rental of a boat; no one is objecting to renting a boat on the UK canals.
tbf it's actually very hard to legally do regular rentals on UK canals as opposed to short term hires at vacation prices and ownership (fractional or otherwise).
But the fractional ownership schemes aren't rental rules evasion or selling the dreams of property appreciation, they're "you can get a 1/12 share for the one-off cost of a four week hire if you don't mind chipping in for 1/12 of the maintenance and mooring costs in future years"
tbf it's actually very hard to legally do regular rentals on UK canals as opposed to short term hires at vacation prices and ownership (fractional or otherwise).
But the fractional ownership schemes aren't rental rules evasion or selling the dreams of property appreciation, they're "you can get a 1/12 share for the one-off cost of a four week hire if you don't mind chipping in for 1/12 of the maintenance and mooring costs in future years"
If the community doesn't like it, then they should have setup an HOA(or another form of a binding perpetual contract).
Going the post-factum-legal-force route is hardly fair.
Going the post-factum-legal-force route is hardly fair.
I mean owning a shared second property is at least better utilisation than one that is always empty when you're not there
...well, yes. But timeshares come in two forms, sometimes called "shared leased ownership" and "shared deeded ownership". The second form is fairly widespread, and it's exactly what you're talking about.
It's certainly true that the shared deed form has advantages (...it's also more expensive upfront, for obvious reasons), but it's not exactly novel.
> So please, less of the "this is just reinventing timeshare" It's a proven model, it works, and good luck to them.
I agree; I don't think they're reinventing anything. And it is a proven model...but I'd still call it a timeshare.
It's certainly true that the shared deed form has advantages (...it's also more expensive upfront, for obvious reasons), but it's not exactly novel.
> So please, less of the "this is just reinventing timeshare" It's a proven model, it works, and good luck to them.
I agree; I don't think they're reinventing anything. And it is a proven model...but I'd still call it a timeshare.
You're missing the reason why they don't want to be called timeshare. Because some locality decided that shared ownership is not allowed in their locality. (I guess no one told them that every married couple co-owns any house they buy)
Which is classic NIMBYism
Which is classic NIMBYism
I hate NIMBY attitudes as much as the next person, but there's a distinction between a house being owned by two people, and a hotel.
Just because I can't tell you exactly where the line is crossed from one to the other[1], doesn't mean a line isn't crossed.
[1] Just like nobody can tell you where a person goes from being a child to an adult responsible for their own decisions, but we draw arbitrary lines at 16, 18, 19, 21...
Just because I can't tell you exactly where the line is crossed from one to the other[1], doesn't mean a line isn't crossed.
[1] Just like nobody can tell you where a person goes from being a child to an adult responsible for their own decisions, but we draw arbitrary lines at 16, 18, 19, 21...
Also, timeshares have a terrible terrible reputation. Hence the drive to try and rebrand as "fractional ownership" or whatever.
It's quite amusing to check out the wikipedia page on timeshares (https://en.wikipedia.org/wiki/Timeshare), which goes into detail on the differences between timeshares which offer deeded ownership versus a contract giving you the right to use the underlying property.
But if you go to the fractional ownership page (https://en.wikipedia.org/wiki/Fractional_ownership) it spends ages going on smugly about how actually timeshares are strictly the contract type, and what sets fractional ownership apart is that you actually have a deed, and even claims that the popularity of the (cool and amazing) fractional ownership model is causing timeshares to try and rebrand themselves as fractional ownership. But the only citation is offers for that is a link back to the timeshare wikipedia page, which outrights contradicts that. Then it goes on to describe "private residence clubs" as a time of "fractional ownership" where in some cases you don't get a deed at all (directly contradicting the immediately previous section). Apparently the distinction is that if it sells for over $1k/square foot, it's a "private residence club" and thus fractional ownership and (nominally) "good", but if it's cheaper than that it's just a "destination club" and thus a timeshare and thus (nominally) "bad". And the only citation given for this is...a single timeshare consultant.
One of these pages is decent; the other seems to have been written by the timeshare industry for marketing purposes. :)
It's quite amusing to check out the wikipedia page on timeshares (https://en.wikipedia.org/wiki/Timeshare), which goes into detail on the differences between timeshares which offer deeded ownership versus a contract giving you the right to use the underlying property.
But if you go to the fractional ownership page (https://en.wikipedia.org/wiki/Fractional_ownership) it spends ages going on smugly about how actually timeshares are strictly the contract type, and what sets fractional ownership apart is that you actually have a deed, and even claims that the popularity of the (cool and amazing) fractional ownership model is causing timeshares to try and rebrand themselves as fractional ownership. But the only citation is offers for that is a link back to the timeshare wikipedia page, which outrights contradicts that. Then it goes on to describe "private residence clubs" as a time of "fractional ownership" where in some cases you don't get a deed at all (directly contradicting the immediately previous section). Apparently the distinction is that if it sells for over $1k/square foot, it's a "private residence club" and thus fractional ownership and (nominally) "good", but if it's cheaper than that it's just a "destination club" and thus a timeshare and thus (nominally) "bad". And the only citation given for this is...a single timeshare consultant.
One of these pages is decent; the other seems to have been written by the timeshare industry for marketing purposes. :)
It's stories like this that make me think we should just have a regulator who can come along and basically go "Nope, not Tech, just 'regulatory innovation', here's 5 new regulations that explicitly make this illegal"
Wasn’t there a show HN for a YC startup with the same idea earlier this week?
poor rich people
Oh the AirBnB of home ownership. As it sounds, they are one regulation/ruling away from going bankrupt. Silicon Valley is full of Snake Oil buyers. I wish I had the tenacity to sell some.
> As it sounds, they are one regulation/ruling away from going bankrupt.
I can't wait. I'm sure it'll move with all the haste of government bureaucracy, but the sooner this gets shut down, the better. This is inevitably going to entangle tons of people who don't know better or think they can make a buck. It's a recipe for creating legal rats nests.
No (with a material interest) wins. I don't even think the banks win. Early investors will make out like bandits. People with purely fiscal interests will largely win (some will get hosed). Equity owners will lose. Information-poor decision makers will lose. Prospective buyers in the neighborhood will probably see collateral damage.
I can't wait. I'm sure it'll move with all the haste of government bureaucracy, but the sooner this gets shut down, the better. This is inevitably going to entangle tons of people who don't know better or think they can make a buck. It's a recipe for creating legal rats nests.
No (with a material interest) wins. I don't even think the banks win. Early investors will make out like bandits. People with purely fiscal interests will largely win (some will get hosed). Equity owners will lose. Information-poor decision makers will lose. Prospective buyers in the neighborhood will probably see collateral damage.
It is a con job. In some sense, it is Darwinism for people who choose to invest in them I guess?
But, it’s all about whether they can jump before the ship sinks.
Leave it to SV startups to reinvent the timeshare.
Yep:
>>To make second home ownership possible for more people — and, of course, make money — Pacaso uses a "fractional home ownership" model. They buy a house, lightly refurbish it, furnish it and then create an LLC for it. They then divvy up ownership of this corporatized house into eight fractions and sell those shares on their website.
>>If you buy a share in a house, you're able to stay in it 44 nights per year, in increments that can't exceed 14 consecutive days per visit.
Edit: Ah, and if you read further, it’s an attempt to get around the regulations and taxes on short term rentals:
>>The county, Brad says, had designated their neighborhood an "exclusion zone," which bans Airbnb-style short-term rentals to preserve the "residential character" of communities. But Pacaso argues that their clients are not short-term renters. They are co-owners of an LLC. This also means they don't have to pay the typical taxes on short-term rentals.
>>To make second home ownership possible for more people — and, of course, make money — Pacaso uses a "fractional home ownership" model. They buy a house, lightly refurbish it, furnish it and then create an LLC for it. They then divvy up ownership of this corporatized house into eight fractions and sell those shares on their website.
>>If you buy a share in a house, you're able to stay in it 44 nights per year, in increments that can't exceed 14 consecutive days per visit.
Edit: Ah, and if you read further, it’s an attempt to get around the regulations and taxes on short term rentals:
>>The county, Brad says, had designated their neighborhood an "exclusion zone," which bans Airbnb-style short-term rentals to preserve the "residential character" of communities. But Pacaso argues that their clients are not short-term renters. They are co-owners of an LLC. This also means they don't have to pay the typical taxes on short-term rentals.
Specifically to reinvent the timeshare while celebrating the purchase of a Lake Tahoe vacation home. I know it takes a certain level of delusion to become an entrepreneur, but things just seem to get more and more absurd.
Hey, at least they avoided calling it a timeshare, so customers have a harder time seeing that there's no significant difference.
Now juicers, on the other hand...
Now juicers, on the other hand...
Do you want the ease of timesharing, the convenience of homeowner associations, the security of subprime mortgage bundling, the property-value-normalizing aspect of AirBnB, and the totally-not-bubbly aspect of MLMs?
Boy, do I have a bridge^W unicorn for you!
Edit: actually this probably is a fantastic company to invest in, precisely because humans are terrible and I have zero hope in our collective decision-making ability, especially in light of short-term profits.
Boy, do I have a bridge^W unicorn for you!
Edit: actually this probably is a fantastic company to invest in, precisely because humans are terrible and I have zero hope in our collective decision-making ability, especially in light of short-term profits.
the crazy thing is, I'm pretty sure there are people that would jump on that first sentence.
I'm sure. Timeshares are a thing. Juicero was a thing. MLMs and myriad other scammy things continue to be things despite a ton of outcry against them.
Everyone thinks they won't be the one left holding the bag.
Everyone thinks they won't be the one left holding the bag.
Seems very similar to this other, recently launched y-combinator company, Ancana:
https://news.ycombinator.com/item?id=28247379
https://news.ycombinator.com/item?id=28247379
Seems like a "modernized" approach to timeshares, likely targeted towards cosmopolitan millennials. But I could be missing something.
As easy as it is to mock these guys for re-inventing timeshares, it does pose interesting legal questions on...
Nope, no, sorry, I really am trying to come up with a substantive discussion point, but this is literally just timeshares. Timeshares do have value if you truly want to spend your vacation every year in the same place at the same time, but that is such a rare desire that most people end up avoiding them like the plague.
I'm not seeing anything of interest here at all from a business perspective, just a few people re-hashing old ideas and ticking off their neighbors.
Nope, no, sorry, I really am trying to come up with a substantive discussion point, but this is literally just timeshares. Timeshares do have value if you truly want to spend your vacation every year in the same place at the same time, but that is such a rare desire that most people end up avoiding them like the plague.
I'm not seeing anything of interest here at all from a business perspective, just a few people re-hashing old ideas and ticking off their neighbors.
Timeshares have most of the downsides associated with home ownership combined with the downsides of renting. However, it’s a bad deal mostly because the margins need to be high to sell them. Splitting a lake house or cabin in the woods among 2 to 4 families can be far more affordable than a second home without the overhead associated with owning and managing a rental. Few people actually want to use a second home every weekend, but renting something 10-20 weekends a year adds up.
Though splitting ownership has its own set of problems. Someone I know had split ownership with an extended family of a couple old properties on the Rhode Island coast. One of the properties was bought out by one of the owners a couple of years back. The other property is being sold. One of the issues is that it had just gotten too hard to coordinate everyone for the short summer season and generally handle upkeep.
Joint ownership for much more than a very simple place invariably gets into at least some level of disagreement over things like maintenance and upgrades especially if not everyone is in the same place financially.
Joint ownership for much more than a very simple place invariably gets into at least some level of disagreement over things like maintenance and upgrades especially if not everyone is in the same place financially.
Yes, that's why an LLC and a contract associated with it is a much better form of ownership.
NIMBYs subverting these contracts makes things much worse.
NIMBYs subverting these contracts makes things much worse.
LLCs and contracts don't solve the complexity of coordinating a large group of people especially as in this case when the season for using the house as a group family vacation place was really less than three months.
Contracts that set out the rules - work best.
If you buy a share in a property with the understanding that you have first-come-first-serve booking of timeslots - all other arrangements are based on good will alone.
That beats arguing in an extended family without set out rules.
If you buy a share in a property with the understanding that you have first-come-first-serve booking of timeslots - all other arrangements are based on good will alone.
That beats arguing in an extended family without set out rules.
> without the overhead associated with owning and managing a rental
Pacaso charges monthly fees for upkeep. What’s the difference?
Pacaso charges monthly fees for upkeep. What’s the difference?
Pacaso is a rather traditional timeshare, but not what I am talking about. Let’s call it joint ownership without a 3rd party. They likely pay 3rd party’s do upkeep, but at whatever standards the group decides not an independent management company.
This can also include improvements like wheelchair ramps, boat docks etc or even removal of things like TV service etc. Again it’s exactly what the group decides without excess or profit.
This can also include improvements like wheelchair ramps, boat docks etc or even removal of things like TV service etc. Again it’s exactly what the group decides without excess or profit.
I may have gotten this wrong, but Pacaso looks like joint ownership (of an LLC), not a traditional timeshare. I don’t really see the difference from what you’re describing here, other than not hand picking the cleaning company - which most people probably consider a benefit.
First their increasing the purchase price by 12% right off the bad that money is simply lost to you and your friends. On top of this they also charge a monthly fee.
Second, if you and your friends are sharing a cabin in the woods, why would you need a cleaning company? Sure, if nobody used it for 6 months you might schedule something ahead of time, but it’s not like you trash your house evey day your there.
Second, if you and your friends are sharing a cabin in the woods, why would you need a cleaning company? Sure, if nobody used it for 6 months you might schedule something ahead of time, but it’s not like you trash your house evey day your there.
I’m going by what I’ve read here, not having owned a timeshare myself. The main issues seem to be, in fact, cleaning and maintenance, plus the hurdle of organizing everything. This stuff is very straining on relationships. Someone has to do the purchase paperwork, deal with permits, hire cleaners, builders, inspectors, check their work, schedule, payments, and so on. Sounds like a ton of annoying work, and they are targeting a millionaires market already - I bet a lot of people with 600k to spare think it’s worth the 12%.
[deleted]
Even in that situation, timeshares are a bad idea. When you own a timeshare, you are obliged to pay fees to the timeshare company (like an HOA). Since it's not rent, you can't just stop paying those fees. You have to find some sucker to buy your timeshare from you to get off the hook. This is why if you check government property tax auctions they're full of timeshares, and why you can easily find people who will pay you to take their timeshare off their hands. It's nothing but an indefinite liability.
Someone pointed out to me that mortgages on investment properties typically have worse terms and/or are more difficult to obtain than mortgages on vacation homes.
So if you wanted to bet on real estate in Sonoma going up but you don't have the funds to finance an entire property, this is a way to make that investment (just tell the lender that this is your "vacation house").
Of course that also brings up the question of how easy it'll be to find a buyer for your 12.5% of an LLC when the time comes for you to cash out.
So if you wanted to bet on real estate in Sonoma going up but you don't have the funds to finance an entire property, this is a way to make that investment (just tell the lender that this is your "vacation house").
Of course that also brings up the question of how easy it'll be to find a buyer for your 12.5% of an LLC when the time comes for you to cash out.
Not only that but you're paying exorbitant management fees (they're gonna clean that sucker every weekened top to bottom whether you want to live there or not) and potentially putting yourself on the hook for ever increasing fees too. That alone absolutely kills the investability aspect.
>mortgages on investment properties typically have worse terms and/or are more difficult to obtain than mortgages on vacation homes.
People typically rent out investment properties. Its pretty rare to invest speculatively by just buy/hold without using the property.
People typically rent out investment properties. Its pretty rare to invest speculatively by just buy/hold without using the property.
Old-school timeshare companies sometimes tried to organise "swaps", which somewhat solves the "every vacation at the same place" issue if it works, which, anecdotally, it almost never did. Still, it was a selling point.
I suppose nothing would stop you from doing something similar with Pacaso, but it seems they haven't got a first party solution yet. Which is amusing, because it is one place where some technology might help.
I suppose nothing would stop you from doing something similar with Pacaso, but it seems they haven't got a first party solution yet. Which is amusing, because it is one place where some technology might help.
My old boss often swapped his family's holiday timeshare with other options with no hassle. Though he had a rather expensive option to start with (five star, gold season, …) so most swaps were effectively downgrades, maybe it is much more problematic to switch sideways (or near impossible upwards).
> Timeshares do have value if you truly want to spend your vacation every year in the same place at the same time, but that is such a rare desire
Plenty of people would be up for this imo.
The issue with timeshares is that at some point, someone's kids/friends will trash the house just before the next sharer moves in, and from that point any goodwill between the timesharers will be ruined.
Plenty of people would be up for this imo.
The issue with timeshares is that at some point, someone's kids/friends will trash the house just before the next sharer moves in, and from that point any goodwill between the timesharers will be ruined.
It seems like that could be solved by having a cleaning service visit between each stay to inspect the property and prepare it for the next guest.
Cleaning services aren’t going to be enough. And the “owners” are going to get into a long discussion about who is responsible for specific depreciations of value (drywall punched out for example) Hell, I’m happy with the way I take care of my house but I guarantee you at least 1/4 of people on my street are not.
Especially with a high value house, I can pretty much guarantee you that you'll have people who are mostly OK with the house looking a bit lived in and various maintenance and other work deferred a bit and others who expect every little paint blemish to be fixed this minute.
I specifically decided not to jointly own my dad's house with my brother when it needed to be rebuilt after a fire. (He moved to a retirement community.) And it was definitely the right choice as there were definitely things we would have wanted to do differently.
I specifically decided not to jointly own my dad's house with my brother when it needed to be rebuilt after a fire. (He moved to a retirement community.) And it was definitely the right choice as there were definitely things we would have wanted to do differently.
This kind of deal seems like it has to be extremely low-cost for an actual stay. You're already paying an annual fee to Pacaso, now every time you want to go, you're paying $200 for cleaning?
Very soon it just makes sense to get a hotel, where you don't front out $100k just to walk in the door.
Very soon it just makes sense to get a hotel, where you don't front out $100k just to walk in the door.
Same as any timeshare, as far as I can tell. My manager is big into timeshares himself, has two (side by side, even, in neighboring buildings on the same Hawaii beach), and extolls their virtues. One time while he was talking them up, I asked for more details and then started googling while we were on the call. I just don't see the draw of it. He goes to Hawaii the same time each year, every year. Gets the same condo, but cannot leave anything there. Pays per-night fees that are pretty close to what it would cost to just rent, on top of annual fees, on top of the initial $75K he spent to 'buy' it in the first place. Even buying them used for pennies on the dollar, it does not seem like any sort of good deal. I could get one for free, and I think my money is better spent renting a hotel room when I want to visit Hawaii.
Talk to someone who has been (or worked for) a residential landlord at any scale. "Trashed" very often includes real damage - not just stuff that can be swept away into Molly Maid's mop bucket, vacuum cleaner, and garbage bag.
Add to that an app for scheduling. Congratulations, you invented Pacaso :)
Pacaso:
> co-owners collectively own real estate, not time
Also Pacaso:
> Your access depends on the number of shares you own. Each share includes 44 stay nights, and they are tracked on a 365-day basis.
https://www.pacaso.com/faq/scheduling
> co-owners collectively own real estate, not time
Also Pacaso:
> Your access depends on the number of shares you own. Each share includes 44 stay nights, and they are tracked on a 365-day basis.
https://www.pacaso.com/faq/scheduling
Ah, but see, you own a -share- in the real estate, and the time is just a bonus that's included! After all, if you owned all the shares, you'd be able to stay in it all you wanted!
eyeroll
eyeroll
> that is such a rare desire
Not rare among a certain wealthy, striving, social class. Not rare at all.
In some circles I intersect with (but do not belong to), the years, or decades your family has been part-time residents in a place is a factor in your self-image and/or place in the pecking order.
Aside from that, part of what I think is fueling this company's growth is that it's not about vacationing. It's about having a (another) pretty place to take your family for 2 months a year, wrapped up in a promise that it's a compelling real estate investment, so you're practically losing money if you don't buy now!
Not rare among a certain wealthy, striving, social class. Not rare at all.
In some circles I intersect with (but do not belong to), the years, or decades your family has been part-time residents in a place is a factor in your self-image and/or place in the pecking order.
Aside from that, part of what I think is fueling this company's growth is that it's not about vacationing. It's about having a (another) pretty place to take your family for 2 months a year, wrapped up in a promise that it's a compelling real estate investment, so you're practically losing money if you don't buy now!
> Timeshares do have value if you truly want to spend your vacation every year in the same place at the same time
Unless the timeshare company even messes that up. Seen that happen to a few people.
Their timeshare options are all gone almost immediately when selecting them opens, oddly enough through a completely different points system that they have points through ... those locations are open.
Unless the timeshare company even messes that up. Seen that happen to a few people.
Their timeshare options are all gone almost immediately when selecting them opens, oddly enough through a completely different points system that they have points through ... those locations are open.
Clearly there are numerous markets supported by this model so I'm an outlier. My wife and I have considered fractional ownership of boats and vacation properties on several occasions. The things that turn me off every time is the inability to put a nail in a wall if I feel like it and the hassle overhead involved. I want to be able to whistle my dog into the car, hop in and go without having to coordinate with anybody else, knowing I have a toothbrush at my getaway spot.
For me, to make a timeshare-like thing work, I think I'd need to be the owner with someone taking the hassle out of renting out access parts of the year, and repackaging financing around that.
With respect to the toothbrush in your getaway spot, I sometimes wonder if there'd be a market for someone arranging picking up, storing and delivering luggage on demand.
E.g. I might give up on owning if I can pick a flat to rent in a region I'd like to keep coming back to, and step on a plane with no luggage, knowing that when I got there, a chest with whatever I left behind last time had been cleaned, packaged up and stored and brought to the next place.
Coming somewhere and having my clothes ready and waiting, and not have to thin about packing would be fantastic.
You can get people to handle forwarding of your stuff from home, but that's complex and expensive. Of you come back to the same area or city regularly, then storage for a cubic meter or so of luggage with local-ish pickup and delivery a few times a year might well be reasonably cheap to operate.
With respect to the toothbrush in your getaway spot, I sometimes wonder if there'd be a market for someone arranging picking up, storing and delivering luggage on demand.
E.g. I might give up on owning if I can pick a flat to rent in a region I'd like to keep coming back to, and step on a plane with no luggage, knowing that when I got there, a chest with whatever I left behind last time had been cleaned, packaged up and stored and brought to the next place.
Coming somewhere and having my clothes ready and waiting, and not have to thin about packing would be fantastic.
You can get people to handle forwarding of your stuff from home, but that's complex and expensive. Of you come back to the same area or city regularly, then storage for a cubic meter or so of luggage with local-ish pickup and delivery a few times a year might well be reasonably cheap to operate.
In Japan they have a system where they pick up your luggage at the airport or your hotel and deliver it to your next destination so you don't need to lug it around.
In America we have rollerbag hell at the airport and people are terrified of checking their luggage.
In America we have rollerbag hell at the airport and people are terrified of checking their luggage.
That's nice, but that still requires me to pack it at home and get it to the airport when departing to start with.
What I'd like is more e.g. deciding I want to visit the French Riviera regularly (I live in London, 20 minutes by train from an airport with regular flights to Nice, and Nice airport is literally walking distance from the town centre, and I love the area), so I buy a chest w/storage there, bring clothes the first time and they pick it up at the end of my trip and hold on to it until I come back, and charges me a storage fee.
It's a niche service, but some places (like Nice) do have companies that specialise in maintaining and handling AirBnb rentals, so maybe it'd be a nice extra income for a company like that.
If I could get them to clean and iron my clothes as well, it'd be perfect. Arriving to have my luggage unpacked and ready, and just leaving it at the end of the trip would get me halfway to the benefits of owning a vacation property for small fraction of the cost.
I've actually contemplated contacting some of the property management companies in Nice to ask if they'd be willing to provide a service like that, even at a substantial premium to offer something bespoke...
What I'd like is more e.g. deciding I want to visit the French Riviera regularly (I live in London, 20 minutes by train from an airport with regular flights to Nice, and Nice airport is literally walking distance from the town centre, and I love the area), so I buy a chest w/storage there, bring clothes the first time and they pick it up at the end of my trip and hold on to it until I come back, and charges me a storage fee.
It's a niche service, but some places (like Nice) do have companies that specialise in maintaining and handling AirBnb rentals, so maybe it'd be a nice extra income for a company like that.
If I could get them to clean and iron my clothes as well, it'd be perfect. Arriving to have my luggage unpacked and ready, and just leaving it at the end of the trip would get me halfway to the benefits of owning a vacation property for small fraction of the cost.
I've actually contemplated contacting some of the property management companies in Nice to ask if they'd be willing to provide a service like that, even at a substantial premium to offer something bespoke...
> I've actually contemplated contacting some of the property management companies in Nice to ask if they'd be willing to provide a service like that, even at a substantial premium to offer something bespoke
If you're the entrepreneurial type... i think this and/or your parent comment are very compelling and i'd be interested (im in US not EU but still)
If you're the entrepreneurial type... i think this and/or your parent comment are very compelling and i'd be interested (im in US not EU but still)
I think the challenging thing with this is that it's a niche market that is easily handled well enough by small local players if they want to, but I think it'd be a touch sales process to make it scale by aggregating fulfillment at scale and get people to think about this as something they want. From my perspective, in terms of the tech side it'd be "easy", and finding people to do the work shouldn't be that hard, but the sales process is something I'd be wildly uncomfortable with.
I suspect this is one of those things where you need a lot higher margin than you think to offset really high customer acquisition costs. You need to find people who believe they'll visit often, probably will visit less than they think, yet won't care too much about putting down 2k/year+ for the convenience, partly aspirationally.
A quick search shows storage units in Nice to stick with that, easily comes down to <8 euro month per cubic metre, btw., so it's certainly doable to make something like this into a relatively cheap subscription. The effort is in finding customers + signing up local partners to deliver.
I suspect this is one of those things where you need a lot higher margin than you think to offset really high customer acquisition costs. You need to find people who believe they'll visit often, probably will visit less than they think, yet won't care too much about putting down 2k/year+ for the convenience, partly aspirationally.
A quick search shows storage units in Nice to stick with that, easily comes down to <8 euro month per cubic metre, btw., so it's certainly doable to make something like this into a relatively cheap subscription. The effort is in finding customers + signing up local partners to deliver.
Well, I could have used that back in the 90s instead of lugging my crap up and down station stairs for the three or four connections between Narita and Urayasu. <sigh>
>a market for someone arranging picking up, storing and delivering luggage on demand.
There are although there might need to be someone on the other end to accept the delivery.
These are mostly for business purposes though. I looked into it once for a complicated mixed personal/business trip and, while I don't remember the numbers, it was fairly pricey for an individual especially if you get free luggage on your carrier.
There are although there might need to be someone on the other end to accept the delivery.
These are mostly for business purposes though. I looked into it once for a complicated mixed personal/business trip and, while I don't remember the numbers, it was fairly pricey for an individual especially if you get free luggage on your carrier.
See my other comment expanding on what I meant. I explicitly don't want to ship it from home, but have it stored in a city I want to come back to regularly so I don't have to ever pack when going there.
Things like AirBNB have really put the nail in the coffin for timeshares, why do something complicated when you can just rent a house for a month at the time you want?
Similar things happen with boats, easier to rent when you need than try to fractionally own.
It sometimes works with small planes, but often those are set up like a "rental" where all renters collectively "own" the little company that owns the plane.
Similar things happen with boats, easier to rent when you need than try to fractionally own.
It sometimes works with small planes, but often those are set up like a "rental" where all renters collectively "own" the little company that owns the plane.
The amount of planning you already need to do to fly a plane makes shared ownership of a plane makes sense.
And to be fair, a lot of the clubs will do shared ownership of a fleet of planes. Not just one.
And to be fair, a lot of the clubs will do shared ownership of a fleet of planes. Not just one.
Yeah, and over time the significant costs of plane ownership are directly tied to "runtime" on the engine - so a plane that's not being "rented" doesn't cost a ton to keep on the flight-line.
Owning (kinda) means you won't be priced out of your favorite vacation spot as well. If you buy when you can afford it, you can keep going to the family beach house indefinitely. If you rent every year but your income doesn't increase with rental prices (which at least during COVID sure do seem to be outpacing inflation), you might not be able to take your "usual" vacation in a few years.
For me the thing that got me to briefly consider buying a vacation home was the flexibility in arrival/departure times and the corresponding advantage regarding traffic. At least in the DE-MD-VA-NC beaches where my family typically vacations, almost all rental houses are rented by the week, with either Saturday or Sunday as the arrival/departure day. Departure times are pretty strict (usually 10 or 11 am) as the place needs to be cleaned in time for the next week's rental. So everyone is on the road at once and traffic Saturday and Sunday during the day is just awful. The last time I drove from DC to the Outer Banks it took me a full 12 hours. I was so annoyed that at the end of the week, I left around midnight the night before scheduled departure, and I made it home in 6 hours. I made the return trip in half the time! If I owned the place, I could show up and leave whenever I felt like it (or not at all)!
For me the thing that got me to briefly consider buying a vacation home was the flexibility in arrival/departure times and the corresponding advantage regarding traffic. At least in the DE-MD-VA-NC beaches where my family typically vacations, almost all rental houses are rented by the week, with either Saturday or Sunday as the arrival/departure day. Departure times are pretty strict (usually 10 or 11 am) as the place needs to be cleaned in time for the next week's rental. So everyone is on the road at once and traffic Saturday and Sunday during the day is just awful. The last time I drove from DC to the Outer Banks it took me a full 12 hours. I was so annoyed that at the end of the week, I left around midnight the night before scheduled departure, and I made it home in 6 hours. I made the return trip in half the time! If I owned the place, I could show up and leave whenever I felt like it (or not at all)!
I don't think you are an an outlier. There are cases where timeshares probably make sense. I knew someone who had one up by a ski area and it sort of served as a convenient known-quantity forcing function to head up for the weekend on a regular basis.
But this? Spend $600K for 1/8 use of a house that you can't personalize in any way or, as you say, just use when you want to? Oh, and want to go somewhere else on vacation? Well, you already have this paid for property. Better go there.
But this? Spend $600K for 1/8 use of a house that you can't personalize in any way or, as you say, just use when you want to? Oh, and want to go somewhere else on vacation? Well, you already have this paid for property. Better go there.
You're forgetting that in the current market theres a likelihood of a very good RoI for that share.
Various investment vehicles are buying up houses all over the world.
Various investment vehicles are buying up houses all over the world.
It's a rather novel arrangement at this kind of price range though. I wouldn't place a bet on this being a better investment than other real estate opportunities.
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> To make second home ownership possible for more people...
Actual LOL. This is no different than Las Vegas time share scams. I hate HOAs with a passion, but in this case, any HOA would prevent this.
Actual LOL. This is no different than Las Vegas time share scams. I hate HOAs with a passion, but in this case, any HOA would prevent this.
I remember when technology solved real problems for real people. It wasn't that long ago. Now, we have this nonsense.
A) They're not a tech company, as many people love to claim for investors these days.
B) They are, however, solving someone's problem. Just because you don't share the same desires, doesn't mean that they're not addressing someone's need/want.
C) Technology still solves a lot of "real" problems, but we have enough of it to solve a lot of frivolous things. (it would be funny if you work for FB, Twitter or tiktok... while writing this message)
B) They are, however, solving someone's problem. Just because you don't share the same desires, doesn't mean that they're not addressing someone's need/want.
C) Technology still solves a lot of "real" problems, but we have enough of it to solve a lot of frivolous things. (it would be funny if you work for FB, Twitter or tiktok... while writing this message)
Like what?
I’m hungry, but I’m stuck at a desk with a computer and a T1 line.
https://www.pizzahut.com/assets/pizzanet/home.html
Side note: not too long after the PizzaNet site, I would often order pizza from a computer lab at the end (ahem) of class so that it was waiting for me by the time I walked home. A critical problem for grad students.
https://www.pizzahut.com/assets/pizzanet/home.html
Side note: not too long after the PizzaNet site, I would often order pizza from a computer lab at the end (ahem) of class so that it was waiting for me by the time I walked home. A critical problem for grad students.
If only there was a way to transmit my voice to the company to place the order.
That would still count as technology, though.
Well, a recent arn-editing technology helped produce vaccines in record time to fight a global pandemic, for instance.
If you want something closer to computers, https://covidtracker.fr/ set up a site to help following epidemic data as well as a site to get a vaccine appointment more easily. The kicker? It's just people using technology to solve a problem, there's no sales afterthought, no business plan, no grift involved.
If you want something closer to computers, https://covidtracker.fr/ set up a site to help following epidemic data as well as a site to get a vaccine appointment more easily. The kicker? It's just people using technology to solve a problem, there's no sales afterthought, no business plan, no grift involved.
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Owning a "share" in one of these "house-companies" sounds like a nightmare. If you want to sell it off, you have to find someone who's willing to buy 1/8th of a house, or buy out 7 other owners to sell the house normally.
I just see way too many issues with maintenance and renovations and so on. Majority has to agree to these. Living in country where housing companies is standard model for apartments there is enough horror stories of smaller ones where old people save money and forgo things costing lot more in long run... At least there you can do most things inside the appartment you control.
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So super mockable company but in many vacation communities some old folks die and pass on their nice house on the lake to their kids. So say 3 kids own the property now. So if timeshares are banned in that area I guess you would say those people need to not share it and force one family member to buy the others out or something? Or they would then need to sell the property I guess. Basically just throwing it out there that many of these houses end up being used by families and often essentially it’s co-owned and timeshared by multiple people —-but because they are the kids of the rich folks that used to live there then is ok I guess. Not talking about a red herring I’m talking about the actual reality that I’m aware of in multiple vacation communities I’ve visited.
I would agree with that, my limited personal experience with mid-atlantic beach towns has been either retiree who invites family, multiple pods of a family that co-own a house like you describe, or sort of normal vacation rental for a week-10 days.
And I think because seeing that, my initial suspicion is they really know their target market, or something, and I'm not it. Because the whole "[bought a house on lake Tahoe]...inspired about making the dream of second home ownership possible for more people"
Makes me think "wow, really? that's the narrative pitch?" But tbf I don't know how you go about pitching a second home without sounding like Marie Antoinette.
And I think because seeing that, my initial suspicion is they really know their target market, or something, and I'm not it. Because the whole "[bought a house on lake Tahoe]...inspired about making the dream of second home ownership possible for more people"
Makes me think "wow, really? that's the narrative pitch?" But tbf I don't know how you go about pitching a second home without sounding like Marie Antoinette.
The faster society learns to ignore these pitches (preferably while mocking whoever came up with it) the better society will be
Ignoring the problem doesn’t make it go away. VCs will continue to pour capital into destructive enterprises so long as there is a whiff of an outsized return possible from doing so. The solution is faster regulation when these orgs begin operating, to more rapidly minimize the harm and damage they’re doing.
In the Northeast US, it's not unusual to have some "summer cottage" or other large property that's been passed down through generations and is now jointly owned and used by a ton of grandchildren, cousins, and second cousins. I stayed in one a few weeks ago.
I wouldn't never get involved with such thing. I'm glad that my parents got out of all of them they inherited, one is not really maintained, one is now filled with junk though maintained and last one was some land on an island in next country, meaning passing over sea twice...
I do understand some level of attachment, but unless all owners agree on what to do there can be many headaches...
I do understand some level of attachment, but unless all owners agree on what to do there can be many headaches...
And in fact, the owners sold the smaller house to one of the family members and the larger house which is split among something like 27 owners is now up for sale for something like $6million.
As I wrote elsewhere I decided not to split my dad's house with my brother. Just seemed like too many opportunities for conflict. I'd rather just go up now and then when it's available.
As I wrote elsewhere I decided not to split my dad's house with my brother. Just seemed like too many opportunities for conflict. I'd rather just go up now and then when it's available.
That's what's called NIMBYism. It seems to be much more prevalent farther west. California seems to be the crown jewel for them.
> So if timeshares are banned in that area I guess you would say those people need to not share it and force one family member to buy the others out or something?
Maybe allow families to share houses if there isn't a third party manager charging huge fees for its exclusive right to determine which person is permitted to access the house on which days...
Maybe allow families to share houses if there isn't a third party manager charging huge fees for its exclusive right to determine which person is permitted to access the house on which days...
Having a website doesn't make you a tech company.
So... timeshares with an app, but they're suing to not be classified as a timeshare because nobody wants them in their neighborhoods and are thus banned. They can't actually explain how they aren't a timeshare, other than "trust us we aren't and unicorn disruption!"
>Potentially even more damaging to Pacaso's ambitions, however: timeshares are banned in many vacation communities around the nation. Hence, Pacaso has strong reasons to insist they are not a timeshare.
>"Unlike a timeshare model, the co-owners that Pacaso serves collectively own real estate, not time," says Ellen Haberle, Director of Community & Government Relations for Pacaso.
^^cool story bro. Except shared deeded ownership already exists in timeshare land, and you own a portion of the PROPERTY, not time. I can't tell if they're actually ignorant to what a timeshare is, or just hoping the judge is.
>Potentially even more damaging to Pacaso's ambitions, however: timeshares are banned in many vacation communities around the nation. Hence, Pacaso has strong reasons to insist they are not a timeshare.
>"Unlike a timeshare model, the co-owners that Pacaso serves collectively own real estate, not time," says Ellen Haberle, Director of Community & Government Relations for Pacaso.
^^cool story bro. Except shared deeded ownership already exists in timeshare land, and you own a portion of the PROPERTY, not time. I can't tell if they're actually ignorant to what a timeshare is, or just hoping the judge is.
If you don't want shared ownership for properties in your area - then advocate for the local government to buy out all of the properties... but that would be shared ownership of all properties.
Imposing restrictions on forms of ownership is in itself a form of forced shared ownership.(If someone is going to tell me that I cannot sell my house to whoever I choose to, then I do not outright own my house)
Imposing restrictions on forms of ownership is in itself a form of forced shared ownership.(If someone is going to tell me that I cannot sell my house to whoever I choose to, then I do not outright own my house)
So if I don’t want a chemical plant built on the property behind my house, I should advocate for the government to buy all the land rather than have zoning laws? That’s ridiculous.
Nobody is telling you who you can sell your house to, they’re telling the person buying the house what they can do with it. That already exists basically everywhere.
Nobody is telling you who you can sell your house to, they’re telling the person buying the house what they can do with it. That already exists basically everywhere.
Yes, you should. And preferably, you should advocate on buying out that land and decide what to do with it.
Otherwise you're free to sue the chemical plant for any chemical smells and damages.
So if I want to sell my house to an LLC - I'm not allowed. Therefore your claim is factually false. Making my ownership just non-existent.
Otherwise you're free to sue the chemical plant for any chemical smells and damages.
So if I want to sell my house to an LLC - I'm not allowed. Therefore your claim is factually false. Making my ownership just non-existent.
> They imagined endless parties, noise, and cars overflowing their cul-de-sac. They worried those staying at "Chardonnay" would drive too fast and fail to heed local concerns about wildfires and droughts. But, most of all, they feared the Pacaso house and more like it would destroy their sense of community and turn their neighborhood into an "adult Disneyland."
We're not NIMBYs but don't come around here with your time share house!
This company is getting weird attention because it's just a time share. It's not even as bad as those landlords that run Airbnb flop houses. These people at least have skin in the game for their house and neighborhood. What a confusing article.
We're not NIMBYs but don't come around here with your time share house!
This company is getting weird attention because it's just a time share. It's not even as bad as those landlords that run Airbnb flop houses. These people at least have skin in the game for their house and neighborhood. What a confusing article.
> We're not NIMBYs but don't come around here with your time share house!
Do they claim not to be NIMBYs? Seems like they are absolutely making that claim and they are happy about it.
Do they claim not to be NIMBYs? Seems like they are absolutely making that claim and they are happy about it.
>It's not even as bad as those landlords that run Airbnb flop houses.
And those Airbnb landlords aren't as bad as slum lords, who aren't as bad as the people running tenements a hundred years ago. But so what? They're still bad.
And those Airbnb landlords aren't as bad as slum lords, who aren't as bad as the people running tenements a hundred years ago. But so what? They're still bad.
My parents did a similar model with 3 other families in CO in the early 2000's. If the model works for you - great, but you don't need a VC backed startup to organize and manage it for you.
The key to these "co-share" models is liking your other partners in the LLC. Pacaso's model seems to restrictive and expensive for their target market.
The key to these "co-share" models is liking your other partners in the LLC. Pacaso's model seems to restrictive and expensive for their target market.
> you don't need a VC backed startup to organize and manage it for you
You do, if the company's business plan is to blatantly ignore laws about timeshares and short-term rentals being illegal in areas where they're acquiring real estate.
You do, if the company's business plan is to blatantly ignore laws about timeshares and short-term rentals being illegal in areas where they're acquiring real estate.
I love the founders inspirational story beginning of "When my wife and I bought our second home in lake tahoe..." (paraphrase)
Where I live, there are various discounts on property taxes and transfer fees if you buy a house as an individual. If a corporation buys the same house, it pays much more. IMHO if this type of ownership isn’t desired, local governments just need to tweak the taxation to make it at least be much more expensive.
So, if I buy every share in one of these house LLCs, can I do what I will with the house? (I.E. ending the relationship with Pacaso, doing major renovation, changing the terms of the agreement).
If so, what happens if I just buy 51%?
It seems that the argument against being a timeshare is that it is structured in a legally different way, where Pacaso itself does not own the house anymore, they just collect a monthly fee similar to a condo association. This seems like really, the ultimate in rent-seeking. I'm going to sell something and force you to continue paying me for it, until you sell it to some other poor sucker.
It seems like the obvious move would be to acquire a controlling share and vote Pacaso out, then start issuing new shares with your controlling ownership to pay for maintenance fees or any other incidental costs of the house. Continue issuing shares until the other owners are diluted enough to own like, < 1 day a year, buy them out for cheap...
It seems like the only way for Pacaso to guard against this would be to retain a controlling ownership, at which point they are much closer to being a time-share.
If so, what happens if I just buy 51%?
It seems that the argument against being a timeshare is that it is structured in a legally different way, where Pacaso itself does not own the house anymore, they just collect a monthly fee similar to a condo association. This seems like really, the ultimate in rent-seeking. I'm going to sell something and force you to continue paying me for it, until you sell it to some other poor sucker.
It seems like the obvious move would be to acquire a controlling share and vote Pacaso out, then start issuing new shares with your controlling ownership to pay for maintenance fees or any other incidental costs of the house. Continue issuing shares until the other owners are diluted enough to own like, < 1 day a year, buy them out for cheap...
It seems like the only way for Pacaso to guard against this would be to retain a controlling ownership, at which point they are much closer to being a time-share.
...or they just don't care, they'll take the investors money now, fail in a year or two, and won't have to deal with the fallout, but rather create a new startup, eg. car timeshare, where you car is an LLC!
You know, owning 51% of these and screwing the minority out of their share is a great strategy with plenty of wholesome American values-slash-jurisprudence on your side. In Salyer v. Tulare the Supreme Court said as long as JG Boswell owned the majority of the flood control district it was A-OK for him to just destroy the farms of the minority owners. You could make a lot of money this way.
I'd guess the LLCs are structured so that Pacaso is the manager, and also so you need a unanimous vote to replace the manager or operating agreement.
So sure, collect 100% of the shares and then dissolve the LLC - 51% won't do it. It's likely that Pacaso would actually appreciate you doing this, as it validates their investment proposition.
So sure, collect 100% of the shares and then dissolve the LLC - 51% won't do it. It's likely that Pacaso would actually appreciate you doing this, as it validates their investment proposition.
They could have put things into the incorporation documents. It's not a secret, what you're signing up-to. They don't need to retain any controlling ownership.
Agreed. I would be very interested in reading an example of Pacaso's LLC incorporation documents.
I would expect some sort of ongoing property management contract between Pacaso and the LLC, which I wouldn't expect to be indefinite or impossible to change via vote.
I would expect some sort of ongoing property management contract between Pacaso and the LLC, which I wouldn't expect to be indefinite or impossible to change via vote.
Ah yes, the legendary honesty, integrity, and forthrightness of Silicon Valley, and Corporate America in general.
My father, an ex-Navy man, pointedly asked me once: “why do you want your own country to lose?” I don’t! I want us to be honest in our success, not smug while saying “if it isn’t illegal it must be OK!”.
The solution to this could be teaching ethics at all levels of education.
My father, an ex-Navy man, pointedly asked me once: “why do you want your own country to lose?” I don’t! I want us to be honest in our success, not smug while saying “if it isn’t illegal it must be OK!”.
The solution to this could be teaching ethics at all levels of education.
Residential homes need to be left to the locals, not for vacation rentals, nor timeshares, nor hotels.
A house next to me was a popular AirBnb for two years, being rented out 6-8 times a month. It was awful to essentially be living next to a hotel. You can have all the rules you want, but vacationers never care about the rules as they will be out of there before they face any consequences.
I wonder how these people would feel if the homes next to them suddenly became hotels with new strange people living there every week.
A house next to me was a popular AirBnb for two years, being rented out 6-8 times a month. It was awful to essentially be living next to a hotel. You can have all the rules you want, but vacationers never care about the rules as they will be out of there before they face any consequences.
I wonder how these people would feel if the homes next to them suddenly became hotels with new strange people living there every week.
The distinction seems to be that there are two flavors of timeshare: shared deeded ownership and shared lease ownership interest [1].
The second one (leasing) is just the "right to time" and a separate company owns the property.
Pacaso is more like the first variant, except the company argues that they don't sell time (they sell 1/8th shares, while a regular time share might have split up deeded ownership into 52 shares where each gets you a week).
I would assume the law in St Helena deals with both classes of timeshare structure. Pacaso's argument then boils down to 8 != 52 (loosely). That's not a convincing argument for "we're not a timeshare".
Edit to add: the one wrinkle is that many buildings in San Francisco and New York are co-ops with a similar "you actually buy shares not the unit" structure. But even then, a single housing unit isn't divided.
(And to be clear, I'm not taking a position on the rights or wrongs here, I was just curious to remind myself what the "definition" of a timeshare was)
[1] https://www.nolo.com/legal-encyclopedia/buying-timeshare-pro...
The second one (leasing) is just the "right to time" and a separate company owns the property.
Pacaso is more like the first variant, except the company argues that they don't sell time (they sell 1/8th shares, while a regular time share might have split up deeded ownership into 52 shares where each gets you a week).
I would assume the law in St Helena deals with both classes of timeshare structure. Pacaso's argument then boils down to 8 != 52 (loosely). That's not a convincing argument for "we're not a timeshare".
Edit to add: the one wrinkle is that many buildings in San Francisco and New York are co-ops with a similar "you actually buy shares not the unit" structure. But even then, a single housing unit isn't divided.
(And to be clear, I'm not taking a position on the rights or wrongs here, I was just curious to remind myself what the "definition" of a timeshare was)
[1] https://www.nolo.com/legal-encyclopedia/buying-timeshare-pro...
There's a new startup called Pacaso selling timeshares. Like most people who sell timeshares, they loudly claim they aren't timeshares at all. Unlike most people who sell timeshares, they also ignore all laws against timeshares.
Because we live in the dumbest timeline, because they claim to be a tech company and not a timeshare company, this means they are now worth a billion dollars.
I guess I shouldn't be surprised; timeshare promoters are well known for sleazy tactics and lies, so... (Mind you, they might well be an unusually good timeshare company, if you actually like timeshares for some reason.)