STR thoughts on a higher end co-ownership property

[Nathan Winston]

Hi all

I'm interested in getting some of the community's thoughts on buying a co-ownership in a higher end property to use as a vacation rental. 

Here's a house that sold recently in Steamboat Springs just as an example: https://www.zillow.com/homedet...

Has anyone done something similar? Is this even a worthwhile strategy to realistically consider?

Beyond the obvious that you'd only be a partial owner (in the above example, 1/8 owner) and not have full control over the management of the investment, what other considerations should be kept in mind with buying into a property like this? 

At first glance it seems like an intriguing prospect to be able to more easily access a much nicer property in an attractive destination town. That said, I have to imagine there would be many more complications involved with seven other owners beyond the basics of managing a wholly owned vacation rental in the first place. 

@Dave Meyer - what do you think?

[John Underwood]

Not a fan of co-ownership (1 partner) Definitely wouldn't do less than 50% ownership.

[Bruce Woodruff]

No fan here either. I would much rather own a smaller property by myself. Ultimately the same money (in most cases) and complete control....

[Nathan Gesner]

No. This is not a wise investment. It sounds attractive because it's easier to get into, but very few people successfully build wealth through "easy" methods. Save up the money and buy your own investment that you control.

[Don Konipol]

Quote from @Nathan Winston:

Hi all

I'm interested in getting some of the community's thoughts on buying a co-ownership in a higher end property to use as a vacation rental. 

Here's a house that sold recently in Steamboat Springs just as an example: https://www.zillow.com/homedet...

Has anyone done something similar? Is this even a worthwhile strategy to realistically consider?

Beyond the obvious that you'd only be a partial owner (in the above example, 1/8 owner) and not have full control over the management of the investment, what other considerations should be kept in mind with buying into a property like this? 

At first glance it seems like an intriguing prospect to be able to more easily access a much nicer property in an attractive destination town. That said, I have to imagine there would be many more complications involved with seven other owners beyond the basics of managing a wholly owned vacation rental in the first place. 

@Dave Meyer - what do you think?

All these type deals, such as fractional ownership, time share, vacation clubs, condotel, etc have a common element…..whatever investment profit existed has already been extracted by the sponsor.  Think of it like this, you could build/buy a residence for say $500,000.  The sponsor sells the same residence to 6 people in equal shares for $125,000 each.  So effectively you paid 50% over market.  How do you profit from that?

[James Sigsbee]

Nathan,

If you are serious about this, I think you should look into the business model of companies already doing it and consider doing it from the sponsor/GP side and retaining an ownership stake instead of being an LP in a deal.  There are several other companies doing this now.  This may be a good move for some for lifestyle, but it looks like a terrible idea as a pure investment to me.   Way too much markup and a lot of deals seem to be negotiated at the asking price of a property without even a favorable acquisition price before all the fees are considered.  

If anyone else has an interest from the GP side, please DM me.