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Q: How does the
scheduling work?
This is specific to each property and the operating
agreement. The schedule typically will be a published
schedule for 2-3 years in advance and each owner will
know exactly the weeks that are scheduled for them.
Q: Can I trade
weeks?
Yes, you can make trades with other owners for their
weeks if that owner agrees.
Q: Who manages the
property?
The property is managed by a third party property
manager that is hired by the owners to manage the
property. The owners will nominate 2 owners each year to
participate in the decisions that need to be made to
operate the property. This is very similar to a
Homeowners Association Board.
Q: How are the
expenses paid and shared?
The management company will collect either a monthly or
quarterly payment from each shareholder to cover their
share of all of the expenses. The expenses are all
divided equally between all of the owners.
Q: Are there any
expenses that are not shared?
The only time that an owner would be required to pay a
bill entirely on their own would be if the owner damaged
the home or left the property dirty and in that case the
cost of preparing the home for the next owner would be
billed to you.
Q: Can the property
be rented?
Each property is different. Most of the properties can
be rented and if one of the weeks that you own and have
not used is rented, then your account is credited with
the rental amount less the charges from the management
company.
Q: Can I allow
others to use my share?
Yes. This is your share, you may use it as you like,
however you are still responsible for any damages that
your guests might do to the property.
Q: How do I know
what weeks I have use of the home?
There is a published schedule for each property that
lists all shares use for the coming 2-3 years. This is a
rotating weekly schedule that offers you time in the
home throughout the entire year. Each year's schedule is
shifted to be sure that all holidays are shared equally
between all owners.
Q: Is there
financing available?
Yes, there is for most properties. A reasonable down
payment and good credit score is required.
Q: Is smoking
allowed at the property?
All properties are non-smoking unless agreed to in
writing by all owners.
Q: Is there a tax
benefit to owning a fraction?
Yes. The tax benefits will be different for each owner
and we suggest that you review this with your tax
professional.
Q: Can I sell later?
If at some point in the future you decide that you need
to sell your share, you can sell it at your convenience.
It would be handled as any real estate sale and could be
done as a for sale by owner or listed with your Realtor.
As there are some specific issues with escrow and title
services, we suggest that you only use experts in these
areas that are experienced with
fractional sales.
Q: Can I give my
shares to my children in my will?
This would be handled the same as any real property in
your estate. The share can be transferred to anyone.
Your tax professional would need to advise you on the
tax consequences.
Q: Can't I just get
some of my buddies to buy this property with me?
Many good friendships have been damaged by friends
buying real estate together. Luxury at a Fraction puts
you together with other like minded families. By
creating a detailed operating agreement that governs the
property, the owners all understand the rules.
Q: What if one share
does not pay their mortgage?
The lenders that have loaned on the fractional mortgage
have agreed that if one owner defaults that they only
would foreclose on the one share. The remaining shares
are not affected!
Q: Why should I pay
more for a fraction than the direct share (1/6th or
1/8th ) of the whole house?
We like to use the pie concept. If you go to a
restaurant and order a piece of pie you will probably
pay about $4.00 or you could buy the whole pie for about
$12.00. If you take the price per piece (6 slices per
pie) the whole pie would cost $24.00, The slice is more
expensive. This same concept applies to real estate.
Q: Can you help me
with areas other than California?
We have companies and contacts in many areas that we can
refer you to. Just drop us an email and we will see if
we can help.
Q: I own a home that
I would like to sell fractionally, can you help me?
Yes we can. We can show you why you should consider this
as an alternative to a traditional sale. In most cases
you can offer the home both ways ( as a whole and
fractionally) until you have the fractions sold. This
allows you the best marketing available to sell your
home.
If you have any other
questions that we have not answered please send them to
us and we will be happy to answer them for you.
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