Timeshare (Legal) set up in Bend, Oregon.
Hi Everyone,
Does anyone out there know, or know someone who has set up a timeshare type of business model for a home. I am looking to be the property owner and sell blocks of days to primarily business's.
Here are a couple of the bigger questions were I would like some council.
1) Knowing that to be considered a long term rental a lease has to be at least 30 days, can I set this up in some way other then a timeshare? Maybe build a lease that reads as the tenant is agreeing to lease the space for 30days?
2) Will setting up something like this be complicated or can it be simple? I would like to build a website for it so I can automate the process so with that in mind how difficult will this process be?
I look forward to any and all of your words!
Thanks, and, Happy Labor Day all!
Why not market it as a short-term rental and let them book it when they need it? If you sell them shares, you're actually selling off your ownership and control. I also suspect a time share would be significantly more involved because you would no longer own the property outright and therefore lose control of what you do with it.
@Nathan G. The city has a radius clause for short term rentals meaning that there is a short term rental in the radius of my home, there is one allowed for a 250 yard radius.
I would be looking to be set up in some way that I am the land owner selling blocks of days. I.e. I’m only interested if I can be set up in a way that I can keep my ownership. My question is in trying to see if that is possible. Or if there is another way to be set up so I can legally sell blocks of days, e.g., having members commit to 30 days which lands in the guidelines of a long term rental.
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you can do fractional ownership through tenants in common.. this is quite popular in very expensive markets Like Lake Tahoe. and there are very high end clubs that do this with homes around the world.
Time share per se is probably regulated at the DRE..
But I would check with the DRE on the tenants in common approach to.. I did a fractionalized note in Oregon and got a fine they are allowed in most states but not ORYGUN..
So start with your regulators and then move down the chain.
@Jay Hinrichs specifically I am looking for some kind of legal set up where I can own the land and sell blocks of days off. The only two ways I can think of are:
A) write out a contract that has tenants/partners commit to 30 days, and have that contract written in a way that it follows city guidelines but does not have a specific timeframe. Looking to see if that if possible?
B) If there is a timeshare type of structure out there (doesn’t need to be a timeshare, I’m looking for a structure in general) that will allow me to keep my ownership and sell off blocks of days on an annual membership basis.
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Originally posted by @Steven Denio:@Jay Hinrichs specifically I am looking for some kind of legal set up where I can own the land and sell blocks of days off. The only two ways I can think of are:
A) write out a contract that has tenants/partners commit to 30 days, and have that contract written in a way that it follows city guidelines but does not have a specific timeframe. Looking to see if that if possible?
B) If there is a timeshare type of structure out there (doesn’t need to be a timeshare, I’m looking for a structure in general) that will allow me to keep my ownership and sell off blocks of days on an annual membership basis.
Seems to me the easiest and best way is through a lease structure.. 12 people with 12 specific months or 4 people with 3 specific months.
once you start to have them come for 7 days then a different party shows up I think then you get nailed on the STR laws.
otherwise you have to give up ownership in some manner..
it was common in Hawaii to have time shares be only 30 to 50 years.. not exactly sure how those were set up.. but you may want to explore those .. one common owner with a bunch of rights to use folks.
@Jay Hinrichs Thanks Jay, Sounds like I have some exploring to do.
@Steven Denio you didn’t mention why you are considering this route. It seems very complicated and would require someone with a specific skill set to manage it. Is the place hard to rent? Have you compared the income you would receive it you split it up in shares (or however you figure out to structure this) compared to a traditional rental property? Did you do a search for your neighborhood for any Air BnB listings to see if anyone slipped through the cracks and find out how? I’m sorry I could t answer your questions and dumped my own questions on your post, but I’m just curious what brought you to this venture. The K.I.S.S. strategy seems like the way to go.
@Ray A Delfi There is a few reasons that I explored this route. Yes, the place rents well and its in a great location. As a matter of fact that specific home funds the cash flow needed to do most of my investments. The reason why I was looking into this type of model was -
A) I simply want to be able to use the house. It is located in a great place in the world, Bend, Oregon and I would like to use the house as a second home but don't quite have the income to carry two mortgages on my own.
B) Airbnb's in the area actually rent more frequently then in most areas due to the outdoor life style of the town there is very little down time. Numbers if I were to be able to use it as a short term rental show a gross of around 70k a year and a net of around 50k with a buy back of a just 6 to 8 months on the initial investment of furnishing the home and permits.
C) I was looking to it as something I can scale, I was in the sales world for years and traveling sales reps need a place to stay, I have great access to the industry too (Specifically the beer industry as I was a sales director for a decade). I was exploring if a website can be built in a way that I could create a community for business to buy into. Its gets a little complicated from there but the main idea was a community that a business can buy into and have access to many homes throughout a region. This would allow me to cash flow property in areas that are currently very find to cash flow properties, Like Seattle, Portland and the Bay for example.
Once a community was built I could add different revenue streams, like say provide tickets to sporting events at face value to the community, letting the community avoid surcharge cost.
In the end, you're correct, it was way to complicated to move forward with. I am currently getting my lot confirmed on that property in Bend. I am very close to the distance of 250 sqft needed to retain my short term rental permit. I am going to "sell" about 2 feet of land to my neighbor. This will give us the distance needed to claim it as a full time short term rental.
@Steven Denio that's a great idea (Selling part of the property so you fit the 250 yard rule), glad you were able to find a solution!
@Justin Ellis Thank you! I’d really like to explore buying in AZ. Can I reach out once I’m ready to make a move down in your state?
@Steven Denio Absolutely! I'm getting all my ducks in a row to start smashing it in the wholesaling space, reach out when you're ready and I'll get you up to speed on the market and find out what you're looking for so I can get you some deals!
@Steven Denio awesome great analysis. It makes sense that you are looking to build an enterprise and I could see why you are doing this research. Definitely organize these tasks and milestones on a scrum board like Trello were you can bring some people on board to assign some of the low hanging fruit and focus on the big picture. You have a lot going on here and also sounds like a manic episode (was not meant to be offensive). Put it on paper and document everything! As an entrepreneur our minds are all over the place; just last night I had a “great idea” that now I can’t even remember what it was. Good luck to you!
@Ray A Delfi haha, so true in regards to those “great ideas” and “manic episodes”. I actually went as far as to call my lawyer who directed me to the lawyer who helped write the time share laws in Oregon. Once I realized that she couldn’t understand if it was legal or not is when I knew it was too complicated.
I’ll look into Trello.
Thanks again.