This was a proof of concept.

Pacaso, founded by former Zillow executive Austin Allison, is revolutionizing second-home ownership by letting you buy just a fraction (as little as one-eighth) of luxury properties in places like Aspen and Napa.The concept addresses a simple reality: most vacation homes sit empty 80-90% of the year.

I like the concept of keeping things simple.I would buy the property separately without your friend.It might sound fun doing a business with a friend but a business arrangement is almost like a marriage.One issue that I can see is the timing of sale - who gets to decide when to sell the propertyHow much time will each person spend?

Love how clear you already are on your goals and buy box, that’s a huge advantage getting started.You’ve already nailed the trade-offs:SFR – simpler to finance, easier to manage remotely, and often attract longer-term tenants.

Here’s how I’d think about it:Relative Homestead route:You get the tax perks: homestead status usually means lower property taxes, plus you can still deduct mortgage interest.It’s simpler paperwork-wise — no leases, no rental registration, no landlord compliance hoops.Friends kicking in “help with expenses” is more like cost-sharing than formal rental income.Official Rental route:You’d be treating it as a true investment property.

Buying and selling these types of properties is also simpler.

Foundation can be simpler like I-beams or need more extensive work like anchors or piers.

Alternatively, its poorly drafted operating agreements or over complexed entity structures that may be more commonplace in complexed transactions but not for simpler loan requests like single family homes or smaller multi-family properties.

Because of that, many people simply hold their California rentals in their personal name with strong insurance to avoid the extra costs, since the income and depreciation still pass through to their personal return anyway.Texas is much simpler because there’s no state income tax, which makes short-term rentals easier to manage there.

Quote from @Noah Laker: I'm playing with a similar concept up in Sacramento.