- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Fractional ownership in a condo
Posted on 6/9/19 at 10:22 am
Posted on 6/9/19 at 10:22 am
Anyone have any experience with this? How is it generally different from a timeshare?
I’ve been looking at some listings along a few beaches we frequent and found one stranger one among the listings. It’s actually offering a 1/26th ownership in the LLC that owns the condo. What sort of things should one consider on such a purchase and what are the ramifications of becoming a minority owner in an existing LLC?
I’ve been looking at some listings along a few beaches we frequent and found one stranger one among the listings. It’s actually offering a 1/26th ownership in the LLC that owns the condo. What sort of things should one consider on such a purchase and what are the ramifications of becoming a minority owner in an existing LLC?
13
Posted on 6/9/19 at 4:24 pm to S1C EM
quote:
hat are the ramifications of becoming a minority owner in an existing LLC?
that entirely depends on the 25/26 remaining
if, for example, one person owns all of those shares, they have full control of the LLC and your minority interest is very limited
the articles of incorporation (or whatever guiding documents exist for the LLC) will also determine a lot of your rights as minority owner
Posted on 6/9/19 at 4:38 pm to S1C EM
quote:
What sort of things should one consider on such a purchase and what are the ramifications of becoming a minority owner in an existing LLC?
Are you willing to have the condo 1 out of every 26 weeks?
Posted on 6/9/19 at 4:44 pm to HailToTheChiz
quote:
Are you willing to have the condo 1 out of every 26 weeks?
Sure, though that's where some of the issue I had with it was. The realtor who listed it said it alternates with one winter and one summer and then one fall and one spring week each year (2 weeks/year). The issue I would have is that with three young kids, I would need spring and fall weeks to coincide with spring break or the last week of May and then fall break. Otherwise, they'd be pretty useless. I can't fathom that there are a ton of people out there for whom the proposed setup would be reasonable. And of course, with such a minority ownership, I'd have little say on the calendar.
Posted on 6/9/19 at 5:23 pm to S1C EM
quote:
It’s actually offering a 1/26th ownership in the LLC that owns the condo. What sort of things should one consider on such a purchase and what are the ramifications of becoming a minority owner in an existing LLC?
Why go through all the hassles of ownership for such a limited interest? It doesn't sound like it will be very liquid/easy to sell when you want to unload it. For such limited use, why not just rent when you want to go?
Posted on 6/9/19 at 7:26 pm to SloaneRanger
quote:
Why go through all the hassles of ownership for such a limited interest? It doesn't sound like it will be very liquid/easy to sell when you want to unload it. For such limited use, why not just rent when you want to go?
Valid points. Not only that, they don’t allow rental of the unit if I can’t use all of my allocated time. I was only thinking about it because it happens to be at a nice resort that doesn’t usually have fractional sales available. It wasn’t really designed for this purpose. This LLC is simply looking to make a buck, or so I figure.
This post was edited on 6/9/19 at 7:27 pm
Posted on 6/9/19 at 8:08 pm to S1C EM
quote:
they don’t allow rental of the unit if I can’t use all of my allocated time.
0 reason to buy. 2 weeks a year that you may or may not even be able to use. Just rent.
Posted on 6/9/19 at 8:18 pm to S1C EM
quote:
Not only that, they don’t allow rental of the unit if I can’t use all of my allocated time
I'd already say to run away but this confirms it
Posted on 6/9/19 at 8:21 pm to S1C EM
Sounds like a timeshare but worse.
Posted on 6/9/19 at 8:33 pm to KamaCausey_LSU
quote:
Sounds like a timeshare but worse.
I agree.
No worries, I’m not doing it. I was just kind of intrigued by the strange method of selling ownership in a condo. The LLC medium is a new one on me. Was just curious what additional considerations one would have to take into account. This one is, no doubt, a bad idea.
This post was edited on 6/9/19 at 8:34 pm
Posted on 6/9/19 at 10:16 pm to S1C EM
Just rent
Posted on 6/10/19 at 6:41 am to S1C EM
The fractional share purchase makes sense through an LLC, but for this type of purchase it should just be much fewer interests to make sense.
Posted on 6/10/19 at 7:34 am to S1C EM
Just remember that however many owners means there is that many wives/ women involved. If you could find 4-5 wives even that could agree on something like a home decoration you'd be a freaking magician. Oh, fridge goes out, let's get all the wives opinions on what new one we will get.
1/26th is terrible and absurd. Half or 1/3rd makes some sense. You may also be able to swap and trade weeks with other owners OP.
But overall, you'd be better off renting then doing a larger partnerership.
1/26th is terrible and absurd. Half or 1/3rd makes some sense. You may also be able to swap and trade weeks with other owners OP.
But overall, you'd be better off renting then doing a larger partnerership.
Posted on 6/10/19 at 9:46 am to S1C EM
quote:
It wasn’t really designed for this purpose
This might be your answer. The condo building may have a requirement that there can only be one "deed" per unit. The traditional timeshare / frac ownership model involves multiple deeds, each for an undivided interest.
So by having an LLC be the owner, you get around that issue. You aren't buying an interest in the condo, you are buying an interest in the LLC. Per the LLC operating agreement, your LLC ownership probably gives you certain rights, including use of the LLC property (the condo) for X weeks a year. In addition, the LLC facilitates cash calls and distributions.
Posted on 6/10/19 at 10:20 am to S1C EM
I can't answer any specific questions you have but my family did something like this years ago. My aunt and uncle went in with 12 other couples they knew from church or wherever and bought a condo in panama city. Each family got 4 weeks out of the year, generally one per season. It was a great arrangement because most everyone knew everyone else, so you coudl reahc out to switch dates or whatever. Any improvements or alterations were voted as a group and paid as a group.
They all sold a few years back but from my second or third hand involvement (ie, getting to use it on vacation and not being involved wiht anythign else lol) I enjoyed it.
They all sold a few years back but from my second or third hand involvement (ie, getting to use it on vacation and not being involved wiht anythign else lol) I enjoyed it.
Posted on 6/10/19 at 11:44 am to S1C EM
There's really two reasons to own a vacation property:
1. to have a 2nd "home"
2. as an asset diversification and hopefully positive "investment"
IMO once you get past 2 or maybe 3 families, you certainly get rid of #1 and #2 is really such a small investment and possible gain that any benefit you get from owning would be outweighed by being locked in to your ownership restrictions.
If you are retired and have been going to the same place for 15 years and plan to the rest of your life, I can see it.
But the year that you give up a week or two because you have too many travel ball tournaments, your mom has cancer so you visit them more, or your daughter gets married...then pretty much any "investment" you had is thrown out the window for that year or possibly 3 or 4 years.
There are also lawyer fees that will need to be paid yearly by the LLC. One or two people don't pay and the lawyer racks up $3000 in fees. Not expensive, but just more BS you have to deal with.
1. to have a 2nd "home"
2. as an asset diversification and hopefully positive "investment"
IMO once you get past 2 or maybe 3 families, you certainly get rid of #1 and #2 is really such a small investment and possible gain that any benefit you get from owning would be outweighed by being locked in to your ownership restrictions.
If you are retired and have been going to the same place for 15 years and plan to the rest of your life, I can see it.
But the year that you give up a week or two because you have too many travel ball tournaments, your mom has cancer so you visit them more, or your daughter gets married...then pretty much any "investment" you had is thrown out the window for that year or possibly 3 or 4 years.
There are also lawyer fees that will need to be paid yearly by the LLC. One or two people don't pay and the lawyer racks up $3000 in fees. Not expensive, but just more BS you have to deal with.
Posted on 6/10/19 at 11:50 am to baldona
I was in Orange Beach a few weekends ago and saw an ad for a 10% ownership in a $900K or higher condo. I'm assuming if it was in that area, it would have to be Turquois
I still don't get that it would be that beneficial, but I guess if one were to have bought in a a perfect time in a down market you would make out ok.
I still don't get that it would be that beneficial, but I guess if one were to have bought in a a perfect time in a down market you would make out ok.
Posted on 6/10/19 at 11:55 am to notiger1997
quote:
saw an ad for a 10% ownership in a $900K or higher condo
Well and there's two things to consider here. One, as an "owner" you get to afford a bigger and better place then you could otherwise.
But you are also stuck with 9 other "owners" who are basically trying to live above their means also. Just seems like you are asking for a headache. Even potentially worse, is the guy that could easily buy that $900k place himself and wants to always put money into it and bitches about every little thing not being perfect.
Posted on 6/10/19 at 1:47 pm to S1C EM
My buddy has one in Vail. He was a destination skier, and he would travel to 5-6 different resorts a year to ski and see the different scenery. He bought into a condo with shared ownership and deeply regrets it. Now his main option is to ski Vail or he'll be losing money, unless he can rent it out for his alotted time. Renting it out seems to be last minute and is only to break even mostly.
Save the money and put it into something else that will grow in value.
I'd recommend against being married to a vacation home that you don't fully own, and won't get to use often and conveniently.
Save the money and put it into something else that will grow in value.
I'd recommend against being married to a vacation home that you don't fully own, and won't get to use often and conveniently.
Posted on 6/10/19 at 1:54 pm to southside
quote:
I'd recommend against being married to a vacation home that you don't fully own, and won't get to use often and conveniently.
Well said. I like the area and will just keep doing what we've been doing. When we retire, we'll have the option of buying outright, so best just to wait.
Appreciate all the responses and please, do keep it going. It appears I'm not the only one who has considered this, so perhaps there is more to learn on the subject.
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News