Since 2013 Lifestyle Asset Group has been a pioneer in Collective Asset Ownership, where you, along with just five other investors, enter into a limited real estate partnership to own debt-free a luxury property for 16.66% of the total ownership costs. If you love vacationing in magnificent settings, My Vacation Home LLC may be the right investment for you and your family.
Owning a vacation home is the aspiration of many Americans. Last year, 18% of all homes purchased were vacation homes, which totaled nearly 1,000,000 properties with an aggregate value of approximately $160 billion. Only 24% of the buyers of these vacation homes plan to rent their property to generate rental income and offset the costs of ownership. In balance, 76% intend to enjoy their residences with family and friends even though, data shows on average, they’ll do so for just over 30 days per year. [1]
Why do the vast majority of owners use their vacation homes for just 8% of the year while paying 100% of the expenses? [2] The answer is quite simple: There have been no sensible alternatives for people looking to buy a vacation home in a beloved destination.
Case in point is the traditional fractional ownership model. The fractional industry has seen extraordinary market share loss in the last 10 years, plummeting by 85% from $1.4B to just $200M last year. There are a host of contributing factors for this startling free-fall. [3] However, the fundamental reason is simply that there is NO resale market for a buyer’s fractional interest. This is because developers commonly mark up the value of the underlying real estate by 50% or more in the fractionalization process, while the resale of a fractional interest is typically 35% to 40% of the original purchase price. And many listings never sell at all.
Undeniably, the desire for a family getaway is strong. Yet, with the fractional purchase option off the table and the cost of going it alone prohibitive, what is needed is an entirely new alternative, one that is both an affordable and sound investment.
Lifestyle Asset Group has developed a game-changing solution, called “My Vacation Home LLC”. [4] This is a shared ownership model that provides for 42 days of annual use — the average for vacation homeowners — while providing a transparent and genuine investment opportunity. Here’s how it works: An LLC is formed to purchase a single remarkable vacation home. The home is put under contract and 6 shares are offered. Upon closing, the shareholders own the vacation home free and clear.
Lifestyle Asset Group debuted My Vacation Home LLC model with LifestyleWaterColor, LLC.
WaterColor is a charming beach community on Florida’s Gulf Coast. The LLC acquired a spectacular home at 33 Sand Hill Circle for $2,725,000 and offered 8 exclusive shares to those with a strong interest in this coveted destination. The response was tremendous — in just 60 days all 8 shares sold and the property closed.
Each shareholder of LifestyleWatercolor, LLC invested approximately $360,000. The combined capital funded an all cash purchase of the $2,725,000 property. The annual costs per year, when divided among the shareholders is only $15,000. This makes the cost for 35 days of annual enjoyment at the WaterColor home around $425 per night. The home is 4,621 square feet, 6 bedrooms, 6.5 baths with interior design appointments in excess of $500,000. To compare, a 320 square foot, single queen room at The WaterColor Inn averages $441 per night, plus taxes.
The debut of My Vacation Home LLC was a success for a very clear reason. While each of the acquiring LLC members loved that they would enjoy their Watercolor residence around 35 nights per year, what resonated with them was that it is an affordable and sensible investment opportunity.
Each of our LLCs has a defined term so all stakeholders know exactly how and when they are getting their investment returned.
The LLC term is typically a 6 or 8-years. At that time, the home will be offered to the shareholders to see if one of the families wants to acquire the property. If not acquired by a current owner, Lifestyle Asset Group will list the property and sell it on the market at the highest possible value.
Each shareholder will then get their original capital contribution returned plus any appreciation that may have occurred over the term.
If the Shareholders are not ready to sell at the end of the term, they can vote for a one-year extension via supermajority vote.
A $4.8m property in Florida where the original capital contribution for each of the 6 shareholders is $864,000 and the LLC term is 6 years:
With 6% compounding appreciation over a 6-year LLC term, each of the six shareholders will receive back $1,134,815 when the home is sold.
Lifestyle Asset Group participates at 15% of net appreciation proceeds above the original capital contribution of $864,000, or $40,000 = $1,094,000 return on your original $864,000 capital contribution, a gain of around $230,000.
Here are those total appreciation numbers based on the original purchase price of $4.8m:
[1] National Association of Realtors (NAR) year-end report.
[2] On a cost per night basis, this can be very prohibitive — particularly so with mortgages, which occur in approximately 70% of all transactions. Additionally, insurance costs in coastal communities can run as high as $30,000 per year. When you add property taxes, repairs, maintenance, HOA or Community Association Dues, utility charges and more, those 30 nights of vacation bliss can come at a cost of $2,000 to $3,000 per night, or even more.
[3] This includes complicated reservation processes that are necessary for projects with 100’s of owners and scores of identical units
[4] This shared ownership model is offered as a securities offering under Regulation D of the Securities Act and more specifically, under Rule 506c.
Other current offerings include Isle of Palms SC, Telluride, CO, Watercolor, FL, (2nd Watercolor property offered), Lake Jocassee, SC, and Columbia River, WA.
Future planned destinations include Kauai, Hawaii, Carmel, CA, Vail/Beaver Creek, CO, Napa/Sonoma, CA, Outer Banks, NC, Cape Cod, MA, Miami, Deer Valley/Park City, UT, NYC, La Quinta/Palm Desert, CA, Charleston, SC and other coveted destinations
With My Vacation Home LLC, people who desire to own a vacation home in a destination they love, can join with just 5 other shareholders and enjoy a multi-million dollar property for just 16.66% of the capital and annual cost. In six years, the property is sold at its highest value, capital contributions are refunded, and the increase in property value is equally shared.
Most importantly, with a highly fexible reservation system and all management demands of vacation home ownership seamlessly handled by Lifestyle Asset Group, families and friends are free to relish every moment of their vacations together and create memories for a lifetime.
My Vacation Home LLC is that affordable and sensible alternative whose time has certainly come.
Lifestyle Asset Group has six single destination vacation homes currently offered under our My Vacation Home LLC collective ownership model. Together with the three additional luxury properties managed under a multiple destination asset model called Lifestyle One LLC, these destinations and carefully selected vacation homes represent the best in location, luxury amenities, dedication to five star service, and potential return on investment.
Lifestyle Asset Group currently has 40 shareholders and more than $24 million in assets under management.
| Seabrook Island, SC | $1,400,000 |
| St John, USVI | $2,000,000 |
| New York, NY | $2,200,000 |
| Telluride, CO | $4,275,000 |
| Watercolor, FL | $2,725,000 |
| Watercolor 2, FL | $3,000,000 |
| Columbia River, WA | $1,200,000 |
| St. George Island, FL | $3,000,000 |
| The Berkshires, MA | $4,750,000 |
| $24,550,000 |
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