I have read several post about Pacaso and recently saw they continued to raise more investor money. They seem to continue growing in size rapidly and claim to be a “start-up”, but a lot isn’t adding up.
For example: Take their Fairhaven property 1755 Fairhaven Pl, Miami, FL 33133 USA
It’s listed as 1/8 share for $856,250 Total home value of “$6,850,000” The property was listed until August 2020 for $4,750,000 before being removed.
I understand Miami real estate has been insane since COVID, so we’ll say the property has appreciated 44% in 1 year (suspicious).
Then we move on to the sale details dated 7/30/2021. The purchase of the property was by an LLC connected to Juan Carlos Escotet – chairman of Venezuelan bank Banesco.
Now we have the share purchase breakdown per 1/8 share: $108,964 for “Pacaso Service Fee” $51,786 for “Home Upgrades & Closing” Bringing the total payment made to Pacaso for 8 shares to $8,136,000
Someone maybe interested because the 1/8 LLC buyer is now paying $2,520 monthly in management fees and lets assume they are high networth and pull the $1,017,000 from their personal line of credit at 3% so $2,540 in monthly interest for an annual cost of $60,720 ($1,380 per night @ 44 nights a year) which isn’t bad for a 4 bedroom mansion on the water in Miami.
Does the LLC borrow against the house even though its investors made payments of $8,136,000? How does this company with $200 mil in real estate assets have a $1.5 billion valuation? What is the scaling of the company? It seems to fall in an interesting place between those that can afford a $5 million house and choose to Airbnb/VRBO themselves (similar to someone chartering their yacht/jet to cover operating cost) and someone who wants a rather high end vacation house, but doesn’t have the means to afford it themselves. This would comprise the .01%-.10%-of earners.