Unicorn Startup Pacaso Taps Potential as Home Prices Increase

By Nicholas Say Nicholas Say has been verified by Muck Rack's editorial team
Published on July 19, 2021

Last October, Pacaso was founded by two former Zillow executives when home prices were surging. In March, Pacaso raised $75 million in a Series B funding round, bringing its total funding to $90 million. At present, Unicorn startup Pacaso is valued at $1 billion.

Pacaso is headquartered in Cincinnati and buys luxury single-family vacation homes. Then, these homes will be sold to a group of buyers through a proportional ownership model as part of an LLC.

Most second homes will be vacant for a period of 11 months each year. And the startup’s goal is simply to make better use of its housing stock by modernizing the years-old practice, known as co-ownership.

Co-founder and CEO Austin Allison said the company has a different form of operation than time-sharing, selling the right to use a fixed period of time in the property.

Additionally, the startup company Pacaso also provides other services, such as integrated finance, interior design, property management and proprietary scheduling technology and so on.

Imagine if a small group of investors decided that they wanted to own a home for investment purposes.

Everything from bill payment and maintenance to design is taken care of so the owner can enjoy a second home and not have to worry about possible problems.

According to a report by real estate brokerage Redfin, depending on the region and time, holiday home prices skyrocketed during the COVID19 pandemic.

Allison disclosed that up to eight buyers can buy shares of a property, but most of the company’s homes are divided between five to six buyers. After 12 months of ownership, Pacaso owners can also sell their shares and have full control.

Pacaso is really a real estate manager that allows people to invest in homes that may create an income stream. Redfin CEO Glenn Kelman thinks wealthy professionals who can work remotely will be the main driver of demand for these second homes.

However, through June of this year, the number of buyers who have locked in on mortgage rates for vacation homes has fallen by 11.1% compared to last year. This seems to signal a potential end of this rising trend.

By Nicholas Say Nicholas Say has been verified by Muck Rack's editorial team

Nicholas Ross Say is a news desk editor at Grit Daily. An award-winning journalist, he covers the daily startup beat. He grew up in Ann Arbor, Michigan and has lived in South America and South East Asia. At present, Nicholas lives in Southern Vietnam where the Sun shines, and the noodles flow like wine. He's written for Blockonomi and Coin Journal, among others.

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