All Forum Posts by: Jeff Klonowski

Really appreciate all the great comments and keep poking holes in this idea... 

It helps us all get better! 

Excellent thoughts... I think the best way to position this is a fractional vacation home ownership opportunity leveraging short term rental income to offset ongoing costs to manage and maintain the property. 

My target investor is a higher earner and likely accredited depending on how this would be structured. They are looking for a higher-end vacation property in a desirable area that requires a lower financial investment (compared to something like a property on Pacaso), no maintenance/management, and minimal ongoing costs. 

For this property, I've assumed a very conservative 2% appreciation. However, as a reference point the cost for prime, lakefront property in the area has doubled in the last 2 years. Location plays a big factor in this area. This location is A+, but you go 15 miles in any direction and it's a very different story.  

I agree John... This has me thinking about my goals & prioritization for this investment: 

In order of importance to me: 

1.) High end property that I can use for personal use and aligns with several requirements I'm looking for. 

2.) Multiple investors to offset the higher level of investment needed to build this property. (I could finance this myself and STR it as the sole owner. However, I'm evaluating whether it's better to have other capital in the deal, so that I leverage more of my funds for other properties in parallel.)

3.) Cashflow for profits (Like I mentioned before, worst case is to break-even which will allow me to control a desirable property that essentially pays for itself after initial cost to build. Anything beyond this is icing on the cake).

Given this prioritization, I agree this wouldn't be the best financial investment to maximize returns.

Great thoughts and agree on all points! 

Time allocation, date selection priority for owners and blackout periods are key considerations I've been thinking about... No surprise, the peak season for this area is Memorial Day thru Labor Day (approx. 14 weeks) which is also the best time to maximize rental income. Demand significantly drops off in the Winter months. 

Assuming 4 investors, the allocation would something like 1 week during the peak season and then use of the property anytime during non-peak times that it's not booked. A lot of details to work out here, but that's the general thought. 

From a property perspective, this area is somewhat mature for smaller rentals like single cabins, 2/1, 3/1, 3/2 homes. The STR competition for these can be tough given the larger supply & demand. The opportunity here is for larger homes that can accommodate 12+ people and multiple families. This size property is very low supply and extremely high demand based on my research and discussions with multiple property managers. And most of these homes are relatively low quality or outdated. I'm a bit biased but this property would be in the stellar category.

My current calculations to break even are an average 96 rental days/year. The assumptions include an average daily rate, higher occupancy in peak period (also factoring out owner usage), minimal occupancy in non-peak months and 20% for property management + maintenance, utilities, etc. 

Really appreciate the feedback! 

I'm currently exploring a new build construction as both a vacation home + short term rental. However, I'm looking at a scenario of co-ownership consisting of 4-8 investors. The idea is each investor gets a fractional percentage ownership in the property (think similar to Pacaso) + an allocation of time to use the property as a vacation home. The remaining availability would be scheduled out as a short term rental. In the case of Pacaso, you only have an ownership stake with rights to use the property + tax benefits. There is appreciation potential, but no additional cashflow opportunity. 

In this scenario, the owner(s) would get:

1.) Access to a vacation home

2.) Appreciation potential

3.) Tax benefits

4.) Cashflow as a short term rental when not in use by a co-owner. The primary goal would be to utilize the cashflow to at worst break even on costs associated with financing, management and maintenance costs. Ideally, we finance no more than 50% with long term debt. 

Other notes: 

- This will likely be setup as a 506(b) or 506(c) 

- Land/Lot is already secured and currently aligning an architect for design.

- Goal is to have property built & ready for use / short term rentals by Spring 2026. 

- Location is Central Wisconsin in an up & coming vacation area. 

Has anyone done this before? If yes, any key learnings or considerations? 

@Sush Girish Unfortunately, no new details on this. I had been working directly with the seller to purchase, but decided he was not yet ready to sell. Still an open dialog but no movement over the last year. Will update this string if/when the deal does happen. Hopefully, good things will come to those who are patient :)

@ Nick & Kevin - Again, really appreciate the great insights... Plus always great to hear from the Pacific Northwest. I lived in Seattle for 5 years. Great part of the county and wonderful people! Thanks for sharing your experience. 

@ Scott P and Wayne Brooks - Really appreciate the additional context and feedback. I will certainly inquire about the "partial release of lien".  I'll keep everyone posted if/when this deal happens and share my learnings. 

Hi Tyler, 

Really appreciate the feedback and insights... Thus far I have consulted with a mid-size, local developer contact to gauge any challenges with developing on the land and potential hurdles with subdividing. In particular any challenges with the city/county. So far, no big red flags. Specific to the county, I'm likely going to try and get a contingency in the deal to allow for due diligence and pre-liminary approval for subdividing. Not sure how successful I'll be with that, but do want to make sure there are no significant challenges subdividing.

Thanks much! 

Jeff