The co-founder of Zillow Spencer Rascoff and the founder of Dotloop have released a new startup company looking to make second homeownership in the US much easier. Pacaso came out of its ‘stealth mode’ yesterday and offers users the chance to own between ⅛ to ½ of either a home from the site’s current inventory or enter an agreement with Pacaso to buy any property from any real estate site they like the look of.
The innovative business model involves Pacaso forming a co-ownership LLC to purchase a property in which users buy a stake with the property ultimately being owned by the LLC. Bill payment, property management, decoration, repairs, and equitable booking of time at the property are all managed by the Pacaso mobile application. Pacaso’s business model is one that is common in commercial real estate, but is a novelty in second-home ownership; the company generates its revenue by charging a 10% fee on purchase and a 1% property management fee every year. Commenting on his company’s model, Rascoff said:
“Through Pacaso’s innovative co-ownership model, second home ownership will be achievable by tens of millions of more people, helping to democratize access to second home ownership”
Thanks to its buzzy business model and A-list founders, Pacaso already counts a whole host of big-name investors including Starbucks CEO Howard Schultz and Amazon big-wig Jeff Wilke as well as VC firms Maveron, Crosscut and Global Founders Capital. The company has announced a seed round of $17 million as well as debt financing of $250 to purchase homes for its inventory.
Although the non-compete agreement signed by Rascoff on leaving Zillow has now elapsed, Pacaso is not designed to compete with the portal giant, but rather provide listings content for it. All Pacaso homes will be listed on the portal to attract interest from interested buyers, although no information has so far been released on how the listings will be presented on Zillow (being as they are shares in an LLC rather than a true ownership contract).
This is the second announcement around a company that Rascoff has founded this week as Monday saw the news that the former Zillow CEO was launching a special purpose acquisition company with the intent of finding a tech giant to take public.