We are contacted most often by developers, individual home owners, and real estate agents who want to know if selling their property in fractional interests, after all expenses involved, will yield a greater net financial return than selling it as a whole property offering. We have provided hypothetical examples below that demonstrate the potential benefits of fractionalizing.
We also help clients who are interested in:
• Keeping two or more months a year of their luxury second home for themselves and selling the remaining portion to other like-minded people
• Locating prime properties to fractionalize as a business opportunity
• Purchasing a luxury fractional vacation home for their personal use
• Minimizing the loss on the sale of their property if they have already lost most or all of their equity
• Formalizing fractional arrangements among family members and friends who currently hold joint title to a shared vacation home
• Making money as a passive investor in fractional projects
Our team of fractional real estate consultants has the depth of business experience to help guide our clients through the many options they may—or should—be considering. We enjoy the challenge of working with our clients to provide reasoned alternatives, thinking both in and outside “the box.”
Fractional Example #1
Luxury Mountain Condo: Fair Market Value $900,000
Sold as a Whole-Ownership Property
Sales Price:
Seller’s Costs:
Net to Seller:
$900,000
75,000
$825,000
Sold as a Fractional Property
Gross Sales:
Total Costs:
Net to Seller:
$1,300,000
325,000
$975,000
Potential Net Benefit of Fractionalizing*: $150,000
* A fractional project’s profitability is determined based on a number of variables. Please contact us for more information about the assumptions used in building this hypothetical example.
Fractional Example #2
Luxury Desert Vacation Home: Fair Market Value: $1,500,000
Sold as a Whole-Ownership Property
Sales Price:
Seller’s Costs:
Net to Seller:
$1,500,000
125,000
$1,375,000
Sold as a Fractional Property
Gross Sales:
Total Costs:
Net to Seller:
$2,100,000
425,000
$1,675,000
Potential Net Benefit of Fractionalizing*: $300,000
* A fractional project’s profitability is determined based on a number of variables. Please contact us for more information about the assumptions used in building this hypothetical example.
Fractional Example #3
Luxury Hawaiian Vacation Home: Fair Market Value $2,200,000
Sold as a Whole-Ownership Property
Sales Price:
Seller’s Costs:
Net to Seller:
$2,200,000
200,000
$2,000,000
Sold as a Fractional Property
$3,000,000
555,000
$2,450,000
Gross Sales:
Total Costs:
Net to Seller:
Potential Net Benefit of Fractionalizing*: $450,000
* A fractional project’s profitability is determined based on a number of variables. Please contact us for more information about the assumptions used in building this hypothetical example.
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