Start-up makes 2nd home ownership more attainable
SOUTH LAKE TAHOE, Calif. — One company is trying to make second homes more attainable in Lake Tahoe through shared home ownership.
Pacaso was formed in October 2020 by two former Zillow employees, Austin Allison and Spencer Rascoff.
“I have always admired how obsessed Zillow is with the consumer and their experiences,” Allison said in an email. “Being part of Zillow for four years certainly influenced how we think about our purpose at Pacaso, which is very consumer-centric. Specifically, our mission is to enrich lives by making second home ownership possible and enjoyable for more people.”
The start-up was created with the idea that while many people would like to be second homeowners, it is too expensive for most.
“Pacaso was formed off of this insight that three out of four Americans with a household income above $150,000 aspire to own a second home,” said Whitney Curry, chief marketing officer for Pacaso.
Curry said that two of the biggest barriers for those people is price and purchase justification.
“It’s hard to justify buying a home that you only use four to six weeks out of the year,” Curry said.
To address both of those barriers, Pacaso has started offering people co-ownership. Pacaso purchases single-family homes in popular markets, including Lake Tahoe.
Potential second homeowners can then purchase the property with a group of other potential homeowners and split the cost of the mortgage. So, people could be responsible for half of the share all the way down to one-eighth of a share.
Unlike a timeshare, people own property rather than just owning the right to use the property.
The other thing that makes Pacaso unique is that it facilitates co-ownership partnership. In the past, if someone was interested in owning a second home, they would need to find several other friends or family members that would be willing and able to buy the home for them, which Curry calls, “DIY ownership.”
That would involve finding a home everyone agrees on, forming an LLC, creating a calendar to schedule when people will visit and just overall getting along.
“Pacaso said, ‘wow, that’s really hard and most people don’t know other people who’s timing, budgets, tastes align,’” Curry said.
Pacaso sets up those partnerships and all the homeowners remain anonymous. In addition, Pacaso gets the home ready with furniture, maintains the property, and helps find local competitive pricing for services such as snow removal.
“Pacaso takes care of all of that stuff and you get to just hit the big easy button on second homeownership and just show up,” Curry said.
In addition, Pacaso doesn’t mark-up any repairs or services; they split the costs between the homeowners. The company also does not allow any short-term rentals so the owners aren’t supplementing incomes for other owners.
An app allows the owners to schedule their visits, pay their bills and recommend changes or upgrades to the property which the other owners can then agree on.
Because of their model, Curry said they’ve seen a really diverse group of people buying second homes.
“Twenty-five percent of our owners come from diverse backgrounds, so people of color or LBGTQ, and we think that’s really fantastic,” Curry said. “It’s just a byproduct of really unlocking this entirely new segment of people who are first time second home buyers and being able to enjoy something that they hadn’t previously.”
Pacaso has gotten feedback from locals in communities where they operate that they are concerned this will drive up home prices.
“What’s really neat about our model is that we actually relieve pressure on the middle tier of housing,” Curry said.
For example, someone who makes $500,000 might purchase a home as a second home that would normally be purchased by someone in the local workforce. If they can split the cost of the home though, that person can afford to purchase a home that would normally cost $2-3 million.
“Suddenly that inventory is available to local people and that’s a win for the local community and a win for the buyer,” Curry said
To learn more visit, http://www.pacaso.com.
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