Remember Picasso? Pablo Picasso was a 20th Century Spanish painter and sculptor who became world famous with some of his artwork selling for millions of dollars.
A young man by the name of Austin Allison became inspired by him as he was searching for a new business venture after leaving Zillow.
He and his wife were looking to buy a vacation home in Lake Tahoe. They found one and bought it. But the process made him realize how difficult it is for most people to afford a 2nd home, especially in an upscale community.
This led him to conversations with a fellow entrepreneur from Zillow, Spencer Raskoff. In 2020, they founded the firm Pacaso with the goal of allowing people to afford to buy 2nd homes in affluent communities. It works this way.
Friends or family members can join together in co-ownership and purchase anywhere from a 1/8th to a 1/2 interest in a luxury 2nd home. Typically, Allison says, if a person has a budget for a $500,000 2nd home, he is priced out of the market. With 7 friends or family members, he can purchase a 1/8th interest and buy a $4 million dollar home.
Allison says it works one of two ways. Either Pacaso finds and buys the home, finds the co-owners and sells to them. Or, the home seller approaches Pacaso who finds the co-owners. Pacaso acts as a full service property manager and handles all the negotiation, maintenance, etc. Allison says they charge a fee for their service and NEVER have co-ownership with the co-owners. Short term rentals are NOT allowed. The home is for the exclusive use by the co-owners and their guests.
Allison says one of the big problems with 2nd homes is underutilization. He claims the average 2nd home is occupied 5-6 weeks per year. Empty homes create community issues. So, the key to any start-up is to have “a product market fit.” Is there a need? Is there a fit? Pacaso solves the affordability issue and the utilization issue. Pacaso has 40 luxury markets around the world. See his 90 second video at www.pacaso.com/blog/our-story. Browse their website to learn more and answer your questions.
