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How Lifestyle Asset Group Improves Upon Fractional Ownership

By Karla Jones

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The Next Generation of Second Home Ownership

In order to truly relax in your vacation home, it's important to know that you have made a good investment. Traditional fractional ownership programs may offer exciting destinations and top-notch amenities, but can they also offer the reassurance that you're not throwing your money away? Lifestyle Asset Group has significantly improved upon the fractional model to make sure you not only have great vacation experiences, but you also participate in a sound real estate investment.

Fractional Ownership on Steriods

The traditional fractional ownership model divides a single property into equal ownership shares. Lifestyle Asset Group's ownership model reflected in LifestyleOne, LLC is much better because we offer equal shares of six residences located in six unique and stunning destinations. This provides for greater diversity in both vacation options and investment opportunities.

Furthermore, each owner receives 4 to 6 weeks of usage that can be divided up at any of the residences each year with the option to share this time with unaccompanied friends and family. That way, you get a variety of destinations to enjoy without having to manage multiple investments.

A variety of residences also means greater flexibility for our owners. We make reservations on a first-come, first-served basis and short stays are no problem. You will never be locked into a 7-night, permanent week assignments or schedules. Cancellations are easily accommodated so you won't have to worry about finding another owner to trade or lose your nights due to a change of plans. In other words, you'll be able to enjoy your vacation time on your terms no matter how unpredictable your schedule.

Let's do the Math

When a real estate developer sells fractional shares of a residence, they are simply trying to squeeze as much upfront profit as possible by marking up the sales price considerably.  They have little concern for what the buyers do once the sale is complete--including the eventual resale of the property.

Let's do the math on a current example so you can see how the traditional fractional model works against you.

A quick search for fractionals in Mexico shows a seller offering 1/13 shares of a luxury residence called Grand Casa Rubia in Puerto Escondido for $235,000 each. When sold out, the seller will receive just a little over $3 million for the entire property ($235,000 x 13 = $3,055,000). A quick search shows that the residence is valued at just over $2 million as a whole ownership purchase.

The fractional developer is looking to profit $1 million by splitting the property into 13 shares, which may be justified because of the immense time and hassle it takes to bring together 13 buyers.  But with that developer markup,  where does this leave the 13 owners when it is time to sell the property? Unless it appreciates by more than 33%, each of the owners will be forced to accept a significant loss. Not to mention there is no easy way to market and resell a fractional interest. That is why most end up on eBay or Craig's List for cents on the dollar.

We are Aligned with Your Goals

When Lifestyle Asset Group acquires a property, we purchase it whole and at current market value with no developer markup. Each transaction is all-cash; ensuring the best possible purchase price.

When it's time to sell, we take care of all the details including contracting with an agent, inspections, staging, and completing the sale to give our owners a hassle-free selling experience. Each owner then  receives back their original capital contribution PLUS 90% of any gains that may have occurred over the 7 year LLC term. Lifestyle Asset Group receives 10% only if there is profit.  If the overall value of the portfolio happens to go down in value (not likely with six diversified locations), then Lifestyle Asset Group does not participate in any returns. We profit only if you profit.

Our goals are your goals: buy at the right price in the right location, impeccably maintain these properties over the 7 years, provide outstanding service, and get maximum sale price at the close of the term.

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Topics: Real Estate Investment, Why Lifestyle Asset Group?, Fractional Investment