How It Works
Our innovative co-ownership model starts with bringing prospective buyers together who share the same interest: owning a luxury vacation home in one of the world’s most desirable vacation destinations. We bring two to six accredited buyers together in an exclusive cohort and facilitate the creation of an LLC, where each buyer becomes a member. Then we use our market expertise to match the partnership to the most desirable properties available.
Co-ownership provides expanded market access to luxury properties. Where a single buyer may have been limited by price, co-ownership through an LLC allows us to leverage the buying power of multiple partners and select from a broader range of the finest luxury homes. Cohana serves the LLC as a buyer’s advisor to find and negotiate the purchase of a property. When the perfect property is identified, each partner makes a capital contribution to purchase the home. Buyers’ capital contributions are secured by the property, which is acquired in an all-cash transaction, and the LLC never carries debt.
Partners enjoy zero-hassle ownership, while we provide property management and maintenance, scheduling, and personalized travel and concierge services. When it comes to property usage and annual operating expenses, each member’s contribution is proportional to their investment. Members typically enjoy a minimum of eight weeks of use per year, and everyone benefits from a flexible, fair and simple reservation process that includes annual rotating priority. Annual fees cover all operating expenses associated with homeownership, including property taxes, insurance, utilities, homeowner association fees, miscellaneous repairs and maintenance, and tax return filings for the LLC. That translates to an effortless in-residence experience.
Profitability is built into our approach. We provide an eight-year exit strategy that mirrors the average holding period of a vacation home, and tax benefits are integral to our profit-oriented model. Rather than paying 100% of the cost and expenses for a second home during the time it’s owned, purchase and operating costs are shared among LLC members. Many Cohana co-owners will be able to take advantage of depreciation and 1031 tax-deferred exchanges – an advantage that’s generally not available in other partial-ownership models. You can then reinvest in other co-ownership homes or another investment property. When the property is sold, the LLC is dissolved and members can realize proceeds from their investment, including their share of any gains in the value of the property that may have accrued over the eight-year LLC term. All the while, you’ll have spent a fraction of the cost compared to the traditional model of vacation homeownership. It’s simply the smarter way to own a second home.
Co-ownership offers an attractive solution for homeowners who feel burdened by the expense and management of a property they may use infrequently. If you’re a seller with a high-end home, we offer divestment opportunities that allow you to rediscover the joy in your property and realize the upside of your investment.
As a seller, you can sell equity in your home at today’s market value and alleviate yourself of related debt, while still retaining partial ownership in your home. You’ll reduce your operating expenses and the hassles of maintenance and management, while experiencing all the benefits of co-ownership.
How many partners can be part of one LLC?
A limited number of members are admitted to an LLC. Exclusive cohorts are typically made up of between two and six individuals.
What kind of LLC is created to purchase a property?
A Single Purpose Entity (SPE) Limited Liability Company (LLC) is created to purchase the property.
How is the property bought and paid for?
Buyers’ capital contributions are 100% secured by the property, which is acquired in an all-cash transaction.
How much time does each buyer have to enjoy the property?
Usage and occupancy is based on the percentage of ownership held by each investor.