georgiaboy
Beach Comber
I own a lot in WaterSound and am considering building and doing a fractional ownership. I am trying to get an idea on how many people would be interested in this?
-
Trouble logging in? Send us a message with your username and/or email address for help.
-
Hello all! We will be performing a website & forum update soon. You may get logged out so now is the time to make sure your email address in your account is correct - go to your account to check it and update it now. Send us a message with your username and/or email address if you need help.
Fractional Ownership in Watersound
- Thread starter georgiaboy
- Start date
georgiaboy
Beach Comber
Considering 1/8 or 1/13. 1/8 would give everyone 6 weeks per year with a few weeks left over and 1/13 would give everyone 4 weeks/year. This would probably be done in a rotating schedule where everyone would have it once a quarter. We are just looking into it at this time but are looking at a 4 bedroom or more. The property would have to be held in an LLC and have equal shareholders to the fractional ownership. St Joe does not have any restriction on an LLC owning the property. The property is lot 10 Wind Rose, if you go onto their website you can find it.
Sally
Beach Fanatic
georgiaboy said:
It seems reasonable to me - but I wouldn't be suprised if St. Joe has restrictions, if legally able. The fractionals I've heard of around here - the property is turned over to a professional association after completetion. Keeps all the particulars and rules fair for all I suppose.
Under $500k or over?
georgiaboy
Beach Comber
$200,000-$300,000. We do not have any concrete figures yet because we are in the early stages. We would have no problem turning it over - looking into that -we would like to keep the overhead down because we would be owning part of it as well.
Smiling JOe
SoWal Expert
There are laws regarding true fee-simple "fractional ownership." You better make sure you talk with a real estate attorney before jumping on the fractional boat. My undersanding is that by creating an LLC as the owner, you are not creating a fee simple fractional ownership. It may be similar, but your bi-laws of incorporation will dictate who has what interest, and all the what happens if's. I know several people who do go in together and purchase property jointly. Typically, these people are close friends.
In a fee simple fractional ownership, any owner could sell his or her interest to anyone else, without the other owners' consent. If you are creating an LLC to bypass the rules, there is much more involved.
Regarding WaterSound allowing people to set up fractionals, I doubt the answer you received was correct.
Bottom Line -- hire an attorney!
In a fee simple fractional ownership, any owner could sell his or her interest to anyone else, without the other owners' consent. If you are creating an LLC to bypass the rules, there is much more involved.
Regarding WaterSound allowing people to set up fractionals, I doubt the answer you received was correct.
Bottom Line -- hire an attorney!
georgiaboy
Beach Comber
Thanks for you are input. We have been in a discussion with an attorney on this and definitely would go about it that way. You are correct WaterSound will not let you deed the property into fractions but they have no problems with a corporation owning a house. We currently own the property in a LLC.
Smiling JOe
SoWal Expert
Instead of using the term "fractional," perhaps you should consider something along the lines of co-ownership or investment group? I think your idea is a great way to reduce costs and risks, you just need to work out many details of the what if's. When you furnish it, I would recommend having an interior decorator select everything with no input from you owners. Don't let your good friends turn in to enemies. Maybe you could say that no type A's were allowed to buy in.
I am one of 10 people who owns a home in Jackson Hole, WY. Actually, the LLC owns the home...I just own one of ten shares of the LLC. We have a three person executive committee that runs the show. One person is designated as the managing member...and in exchange for dealing with bill paying, maintenance, etc, this person doesn't have to pay the 1/10th share of normal expenses such as utilities, taxes, insurance, etc. There are 'management' companies in South Walton that will do this for a fee. Our arrangement works particularly well because there is no mortgage on the property. LLC members either paid cash or, as I did, got a home equity loan to purchase a 1/10th share. Also, we don't allow rentals...and we have a comprehensive operating agreement that spells out rules and regulations. I believe this is a much less complicated arrangement than fractional ownership. It was easy to do because we purchassed an existing house but we did have a lawyer guide us through the laws of Wyoming, in order to assure that everything was done properly. Any member of the LLC is free to sell to anyone else...though the right of first refusal is given to other owners. Some of our owners own two shares. So far, the arrangement has worked very well. Send me a PM if I can provide additional info, such as operating agreements.
georgiaboy
Beach Comber
GVM - Thank you for your input. I have sent you a PM.