With an experienced management team behind it, this luxury vacation home shared ownership fund is launching “Homesets” in which a group of 5 homes is owned and enjoyed by 21 people or families.
Team
The founder of My 5 Homes, Adam Capes, was also the co-founder of the Equity Estates Fund 1, launched back in 2006. He then went on to found the philanthropically focused G2G Collection which raised millions for charity, and he is now back with a pure real estate ownership structure with My 5 Homes. Prior to all this, he first came into the shared luxury home sector on the sales team at destination club Private Escapes in the early 2000’s.
COO Brandon Dale was also at Equity Estates and as Managing Director led all of the fund operations for many years.
Co-Ownership Model
The overall model is that 21 individuals or families buy 5 vacation homes between them, and then have use of those homes for their vacations for up to 12 weeks per year. My 5 Homes is the management company and takes care of all the reservations, upkeep, maintenance and bill paying. This broad structure is based on a successful company in Europe called 21-5, which has been running for over a dozen years, and has over 700 total owners across multiple 5 home funds.
“We took the best part of second home ownership - which is access and availability - and combined that with the best parts of fractional and destination club ownership - sharing the costs, reducing the upfront amount and annual amount, and also taking care of all management and maintenance. The entire platform is built around the theme of being easy to understand, easy to use and easy to enjoy." said Adam.
Owners are also able to exchange their 84 nights each year for homes in other homesets, giving them vacation use in any of the My 5 Homes managed homes. They also include a Peak Date Guarantee that gives all owners the ability to reserve their favorite week or even month in their favorite home every year.
Another benefit of the model is that if an owner does not want to personally use all their time, My 5 Homes will rent out the extra time, and use the rental income to offset their annual shared costs. For instance, an owner may choose to take four weeks of vacation, which leaves over 8 weeks of time to rent out and earn rental income to cover maintenance, utilities etc. The owners get the initial choice of nights on the reservation calendar and so can choose their preferred nights prior to the balance being rented, which could potentially cover the entire cost of their vacations for the year. My 5 Homes handles all the rental management aspects.
Structure
My 5 Homes calls each group of five residences a “Homeset” and has three Homesets that it is currently offering.
Each Homeset is owned by an LLC and the owners are the sole shareholders in this LLC. My 5 Homes has no ownership interest in the homes or the LLC. Owners pay an initial acquisition fee to buy their share of the LLC and then also pay annual fees to cover the operating costs of the homes.
Each LLC is self-governed by the owners and the expectation is that homes will be sold after 10 years, when the proceeds are returned to the owners. Owners can vote to extend this period, for instance if the real estate market is not ideal for sales at the 10-year mark, and owners can change other terms in their agreement if they want to do so.
“We’re putting in a lot of self-governance, so the owners can decide,” Adam told SherpaReport, adding “it’s easy for someone to sell their interest after the first 12 months, and owners can even choose to terminate the management contract with My 5 Homes.”
Homesets
The first three Homesets consist of:
- All beach condos in Bahamas, Turks & Caicos, Florida 30A, Miami, FL and Playa del Carmen, MX
- City, Beach and Ski homes in Hilton Head, SC, Bahamas, New York, NY, Park City, UT and San Diego, CA
- Outdoor adventure homes in Whistler, BC, Costa Rica, Tulum, MX, St. George, UT and Salt Lake City, UT
Shares start at $395,000 for the beach condo Homeset and include the 12% premium on the initial home purchase, which is My 5 Homes fee for structuring and setting up each Homeset. At a share price of $395,000 the homes will average a little under $1.5m in value.
The shares in the city, beach, ski Homeset and the outdoor adventure Homeset are priced at $795,000 and will have homes valued a little under $3m.
“Owners can show up and enjoy their vacation homes and leave and not have to think about any of the downsides of 2nd home ownership, such as taking care of the property, and having to worry about everything,“ said Adam Capes.
