Over the past couple of years I have had the pleasure of speaking to hundreds of Brokers and Realtors across the country about fractional vacation homes. It seems none of them has too much of an interest in fractional vacation homes.Being in the Construction and development business for over 20 years I too for the longest time was hesitant or downright resistant to new ideas. As I grow older and look back and see some of the innovations that have taken place in the industry, I can say some have worked and some did not. I think one of the biggest changes I’ve seen is the introduction of Home Depot. In 1989, Home Depot opened its 100^th.h store, and the way lumber was sold started to change drastically. When I first went into Home Depot I was shocked at what they had, it was so large that I figured most people would still prefer to deal with the smaller local lumber yards. But soon more people went to Home Depot and found out they would rather buy there because it was cheaper. Now 19 yrs later we have only a small handful of local lumber yards left and from what it seems like, there is a Home Depot on every other street corner.

The reason I used Home Depot as an example is because I am very familiar with it and I never thought that company would survive. And now, over time I must admit I shop there myself. I am not comparing myself or my company to Home Depot by any means, what I am saying is we should always look at new ideas and concepts.

When I decided to enter the Stand Alone Fractional Vacation Home Market I always knew in the back of my mind I would need the support of the local Realtors but never did I think It would be so hard to get their attention. So I hope this post intrigues all Realtors but especially those who work in Luxury markets in the following areas.

1. Water frontage or beach areas

2. Ski Areas

3. Large Metro Destination Areas (ie. Las Vegas)

4. Golf Destinations

Through my many conversations a few of the same misconceptions and thoughts arose:

1. Its just like a timeshare

2. What if I don’t get along with the other members?

3. What if my fellow owners don’t pay there share

4. Who will take care of it?

The answer to the most common question: Unlike a timeshare, Fractional’s are a deeded interest in the property . Your fractional share can be sold or passed down to your family. The second is thought was, “What if my clients do not get along with the others in the group?”. The answer to that is simple, they will never see them or probably never even meet them. Any contact through the member is done through the management company. The answer to the third most common question regarding non payment of fellow owners: When the fractional agreement is set up for a Stand Alone Fractional Vacation Home the documents will spell out everything that is needed so all owners will know what their responsibilities are and what is expected from them. It will also spell out when they will be using their property for the next 6 years using a rotating schedule (if developed as a 1/6 fractional). And lastly, each property will be assigned to a management company that will handle all aspects of the property, from paying the taxes to cutting the lawn to assisting owners in switching their time. And at closing an escrow fund will be set up to handle any short falls that may occur.

How can fractional’s help you as the realtor?

Now while not all properties are suitable to be fractionalized and by no means are fractional’s the complete answer to save a bad market, there are a few things that you as the realtor may benefit from

One example would be if you had a buyer that is on the fence about selling because they still use the house but are tired of all the costs, converting to a fractional is the perfect solution. This same scenario would work in a new build development where a builder may have some luxury standing inventory.

Other possible benefits:

Additional revenue source

Move Inventory Quicker

Attraction Of More Buyers

More Options For Your Clients

Close More Sales Due To Affordability

More Networking

In closing I just wanted to touch on a few points about Stand Alone Fractional Vacation Homes. I could write for hours on this but I feel most of you would stop reading. While it is not the answer to everything, it is here to stay and will become a large part of the way Vacations homes will be sold. When I decided to make this an extension of my current development company I saw a demand for a product and while it is still in its infancy it will continue to grow. I am looking forward to fulfilling you and your clients’ needs. I am always available to answer any questions you may have & for a more comprehensive list of development services we will be offering, please contact me.

Oh and one other piece of info :

If you’d invested $1,000 when Home Depot went public in 1981, you’d have been worth around $1.4 million in January 2000.

If you think you may have an interest in hearing more feel free to contact me at

jeffrey@desertquarters.com or call 716 909 8664

Second Home Options – Ways to Share & Save

A recent NY Times article cited fractional ownership as a fantastic second home option that allows homeowners to save money. “Various options are out there that let even regular folks have a piece of the vacation-home pie,” writes Billie Cohen.

Sometimes people choose to own a fractional second home with friends or family members. Imagine having your next family reunion at a spacious million-dollar-estate — complete with: indoor and outdoor hot tubs, marble floors, plasma screen TVs, professionally landscaped grounds, a swimming pool and full access to a luxury club with restaurants, golf courses, fitness centers and full-service spa.

Other times people choose to purchase a home with complete strangers, overseen by a professional management company, that gives them 4 – 12 weeks of usage each year. Usually owners never even meet each other in this scenario and a maid service automatically arrives before and after each transition, so the fractional ownership home is always in mint condition.

“The basic idea is that you’re paying for what you actually use,” explains lawyer Andy Sirkin. He also adds, “The truth is that the smaller the group, the harder it is to get along, and that family and friends don’t get along better than strangers.” He said the key to fractional ownership is clear documentation that outlines how the co-ownership will work.

Source: http://www.nytimes.com/2008/05/16/greathomesanddestinations/16your.html?ex=1368676800&en=42e84fc2f25c2ed0&ei=5124&partner=permalink&exprod=permalink

Lincoln City is one of the latest cities to offer Americans their portion of a multi-million dollar home. The Oregon Coast boasts numerous Oceanside homes – many which sit vacant and wasted for most of the year as vacation homes.

“When I spoke to the owners, they told me that, when they did use the house, they spent most of their vacation time doing maintenance,” said developer Gordon McMahon. “They never really had time to just relax. It didn’t make sense.”

McMahon began purchasing the best selection of those stunning mansions – gutting them and undertaking massive renovation projects to create “top-of-the-line luxury showplaces” and “one-of-a-kind designer homes,” which he could offer on a fractional ownership plan. He even fully furnished the properties and added home theatres, pool table, luxury spas and includes convertibles in each garage for tenant use. The best part is that this Oceanside lifestyle is not for a select few millionaires, but suited for someone willing to pay a $399,000 price tag.  

Under the fractional plan, Oregonians leverage their resources and only buy as much of the home as they’re planning to reasonably use – all the while providing them with a deed, the opportunity to gain property appreciation assets or pass the property on in their wills and the ability to secure bank financing.

Each owner lives in McMahon’s mansions for seven weeks out of the year and owners never cross paths or even need to speak to one another. After the cleaning and maintenance crews roll through, one would never know the place had been touched. The management team handles all scheduling, stocks the kitchen with the owners’ favorite foods prior to arrival and allows for on-site storage.

According to Ragatz studies, 80% of fractional owners are “very satisfied” with their arrangement. The study also predicted that “at least half a dozen” fractional properties would emerge in Oregon within the next 18 months.

Source:http://www.newportnewstimes.com/articles/2008/07/16/business/business01.txt

We frequently get calls from poker champions who spend a significant amount of time in Las Vegas, particularly during the hot summer months when the World Poker Tour is happening. They’re big winners who could easily afford to buy a home in one of Sin City’s gated communities… but they’re also strategic thinkers. Why buy a home for 52 weeks/year that they’ll only occupy for 14 weeks?

Here at www.desertquarters.com , we offer many premium properties right on the Las Vegas strip that are divided fractionally, so you can live here when you need to but head back home, without worrying if the lawn has been mowed or if squatters have moved in. Sure you could stay at Caesar’s Palace or The Venetian… but wouldn’t it be nice to have a little piece of home and familiarity each time you return?

At Turnberry Place, you’ll enjoy interior features like marble floors, Sub-Zero refrigerators, Italian cabinetry, Jacuzzi tubs, as well as amenities like his and her health club spas, limo service, wine tasting rooms and gourmet restaurants. While you’re gambling at the casino, there are amenities that your whole family can enjoy! The best part is that, at the end of the day, you will be holding the deed to a property – not just throwing money out the window to rent a hotel room. A fractional home is a valuable asset your family can enjoy for years to come.