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 at any time and any price if their home is fully sold — or after 12 months of ownership if shares are still available. (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.
