Co-Ownership Home Buying Process - Key Differences | Pacaso

Pacaso transactions differ from traditional purchase — in good ways

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Laura Vecsey

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Real estate co-ownership isn’t new — families and friends have jointly owned vacation homes for ages. But DIY co-ownership can be difficult to implement. That’s where Pacaso comes in, bringing professionalism and real estate expertise to the table. Pacaso buys an amazing home and creates a property-specific limited liability company (LLC) with a maximum of eight owners. Each home is professionally managed and maintained by Pacaso. Add Pacaso’s equitable and easy SmartStay system for scheduling time in the home, and the traditional pain points of co-ownership are history. As a trusted partner to second home buyers, you want to be ready to clearly explain the similarities and differences between whole home buying and buying a Pacaso. Here are the key points:

What’s the same?

  • The buyer is a deeded owner of a real estate property asset. Pacaso acts as the third-party manager of the LLC but is not an owner.
  • Real estate agents receive commission for their services and can be as involved in the sale process as they'd like. 
  • Buyers can finance their purchase with loans up to 70% of the share price. They can also use other sources such as a HELOC, personal loan or cash. 
  • The legal forms and closing process will be largely the same as a standard home purchase. (A few differences are noted below.)
  • Owners can sell their Pacaso anytime after the first 12 months of ownership, listing it at the price they choose. (Fellow owners have first right of refusal.) 

What’s different?

  • For sell-side transactions, Pacaso may buy the whole home or only a portion, depending on the seller's preference. 
  • Pacaso forms a property-specific LLC and signs the closing paperwork on behalf of the LLC. 
  • Each buyer can purchase the amount of home they’ll use, ranging from 1/8 to 1/2. This gives buyers the chance to co-own a more expensive home than if they were buying a whole home.
  • Buyers can access up to 70% financing and a competitive 10-year adjustable rate mortgage through Pacaso's financing partner. Pacaso then serves as the corporate guarantor of the loan.
  • Each buyer signs an owner operating agreement for the LLC; at closing, they collectively own 100% of the home. 
  • Owners know their costs in advance, because monthly operating expenses, including maintenance, taxes, insurance and utilities, are budgeted for annually and include a fixed monthly management fee of $99. 
  • Pacaso handles the property management and bill paying, and provides the scheduling technology to ensure equitable access to all owners based on their shares in the home.
  • Pacaso assumes financial responsibility if an owner defaults on payments, protecting the home’s other owners. 
With Pacaso, “different” is a smart, modern way to help more people realize their dream of second home ownership. 

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