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Equity Estates has initiated a waitlist for new investors in Fund IV. If you’ve been following our growth this year, it should come as no surprise. A waitlist program is evidence of how carefully we acquire residences and target the best availability for shared ownership of luxury vacation homes. Our fifteen-year history of continuous improvement separates us from the competition, regardless of how well backed they are by venture capital whose primary concern is a return on their capital, not yours.

Most people I speak with have a lot of questions about the waitlist. Why are you rolling this out now? How does it work? What does it mean for new investors? Allow me to lay it all out for you.

 

Why Is This Happening?

Equity Estates cares about making smart buys and ensuring our average occupancy ratio. We target 60% occupancy and 40% vacancy. This has proven to be a successful balance of shared cost and shared use.

We’re finding the best buys – for long term use and appreciation potential – to be homes that require new furnishings and other improvements. Some large, some small. This approach requires an effective strategy, including an awareness of timing of when we release a property to host our investors. Hence the waitlist.

How Does The Waitlist Work?

We’ve chosen to waitlist new investors to help manage residence availability. It’s very straightforward.

  • To join the waitlist, new investors make a deposit of 30% of the capital contribution.
  • No interest is due on the outstanding balance and a minimum 60-day notice will be provided when the money is needed to close on a home.
  • Waitlist investors are assigned a Personal Travel Concierge, given a welcome orientation, and receive access to Voyager, our Investor Reservation Portal.
  • Waitlist investors immediately enjoy unlimited last-minute travel to portfolio residences reserved within 21 days of arrival for only $600 per night.
  • With each new residence purchased, we’ll release a group of waitlisted investors.
  • Once activated, investors may begin reserving their Allotted Nights (typically 15, 30, or 45 nights) as far into the future as they prefer.

 

 

Ensuring The Best Flexibility And Availability In The Industry

If you’ve done your homework, you already know there are several business models offering travel to private luxury residences. Companies manage availability in different ways…and it’s a real point of differentiation. Here are the three main ways it’s done:

  1. Variable pricing
  2. Fixed dates or rotating schedule format
  3. The Equity Estates Method

 

Variable pricing, aka, yield management, is a strategy that allows a company to maximize revenue for limited inventory. Think about your own experience with airline seats or hotel room reservations. Prices are significantly higher for high demand times when you likely want to travel. If done properly, variable pricing can help an operator manage supply and demand to maximize its profits to whatever the market can tolerate. Here’s the rub. Every potential customer (i.e., fellow club member) is an added competitor. Bigger is not always better. These clubs have no need for a waitlist, as the more members competing for nights, the higher the profitability for the operator.

Fixed dates or rotating schedule is synonymous with timeshare or fractional use. This type of calendar program is the definition of timeshare. Customers own or have rights to specific dates, and they may float or rotate over time. This process allows for full utilization for the highest number of owners. The operator’s goal is maximum occupancy for the entire year, leading to maximum profitability on the sale of the fraction or timeshare. Great if you want the same thing every year. Not so great if you are looking for a little variety or flexibility.

The Equity Estates Method focuses on a target occupancy ratio of 60%. We consider an individual home’s calendar being “full” if we have 210 nights of reservations. This means 40% is intentionally left vacant, allowing more flexibility for both those who like to plan ahead and those who don’t. It’s the most generous accessibility we’ve come across. Most importantly, there is no financial incentive to target a higher occupancy ratio. We are more like a cooperative, sharing resources fairly with intentional down time to support reservation flexibility and effective maintenance plans.

 

Now Is A Still Great Time To Join

The waitlist helps investors plan for a smooth transition from what they may have already on their travel calendar before entering the Equity Estates life.

If you are ready to learn more now, please let us know. And if you are not ready, that’s perfectly fine. We will still be here when it is the right time for you.

Call us at 404.445.8501 or click here to schedule an appointment with one of our Investor Relations Team members.

Until next time, safe travels!

Philip Mekelburg
CEO, Equity Estates

 

It has been an incredibly busy year on the real estate acquisition front. Our strong recent investor growth was followed by commensurate levels of new real estate acquisitions. That means I travel. A lot. Even though we are in a pandemic. It’s given me an opportunity to send snapshots to my mother of me wearing a mask while flying. She worries. Plus, she always wanted me, her only son, to become a doctor. Mask wearing is about as close as it’s going to get.

Over the past ten months, we’ve acquired nine new residences. Big Sky, Napa Valley, the Florida Keys and Miami were the most recent additions to our residence portfolio. And stay tuned for some new announcements soon.

Wait a minute, Philip. Isn’t this a terrible time to be buying right now? If you’ve been looking for a second home (or third), you might have noticed luxury real estate markets are very competitive. So how do we continue to find gems at the right price? In short, we’ve had nearly fifteen years to perfect our residence buying best practices. Keep reading and I’ll let you in on some of our secrets.

The Perfect Storm Creating This Tight Real Estate Market

Homes aren’t just selling. They are selling at a record-setting pace in some markets. While that’s good news for sellers, it can give buyers heartburn…especially in affluent neighborhoods and the most desirable vacation home markets. I recently had a phone conversation with our realtor in Lake Tahoe to review newly listed homes. Within three days, they were all under contract. Many realtors look and sound exhausted, and they have right to feel that way—it is that busy in many markets. Here are a few articles that I found in a quick Google search:


With unprecedented low levels of inventory and equally low mortgage rates, the market has become competitive to start the year. Coupled with COVID-fueled demand for residences outside traditionally hot metro areas, prices are reflective of handsome appreciation over prior year, and most home listings priced right are getting contracts within 30 days.

In many cases, potential buyers are outpriced in competitive markets or forced to make rush decisions. Not a good formula for new or infrequent buyers. Regardless of how many years down the line you might want to exit, you need a proven way to ferret out good buys if you wish to make money.


The Equity Estates Difference

So how do we do it? How do we continue to find smart buys which will deliver the right travel experience with the right return? Over the years, we’ve learned (sometimes the hard way) these three keys to successful acquisitions in any macroeconomic environment.

  1. Understanding investor preferences
  2. Building long-term relationships with realtors
  3. Extreme patience + robust due diligence + stomach for renovations


First, keeping our fingers on the pulse of investors’ destination preferences is an ongoing, purpose-driven exercise. It helps us identify meaningful targets while excluding trendy fads which won’t stand the test of time. We receive regular feedback from our investors. Last month, we asked hundreds of prospective investors where we should buy next. The results, as always, were extremely informative. They validated that we’re currently looking in the right areas plus added a few new opportunities to our shopping list. We have even doubled down with more than one property in certain high demand markets like Turks & Caicos, Costa Rica, and Los Cabos.

Second, when we circle in on a new market, we find the right local real estate expert. Sometimes we buy right away. Other times it may not happen for a decade. But we maintain our relationships and keep tabs on the markets we care about. We find partners that get to know us, understand the expectations of our investors, and who are willing to work hard to uncover motivated sellers, i.e., those that want (or need) to liquidate.

We are also very data-driven purchasers who analyze market trends over time on key metrics like price per square foot. Access to this information is critical for us, but not all realtors can (or like to) work on that part of the transaction.

Finally, there’s no substitute to patience and hard work. Short cuts and time pressures often lead to poor decisions. It never ceases to amaze me what doesn’t get caught with a typical home inspection or what fails to get disclosed by a seller (knowingly or not). Don’t be afraid to get into the attic and explore the crawl space like I do. Where we find problems, it gives us an ability to negotiate from a position of strength due to first-hand knowledge. We feel empowered to walk away when we uncover undisclosed impairments which may impact our objectives and goals for a property.

Especially when renovations are planned, going in eyes wide open is important. In certain markets when you can’t check in personally on daily progress, managing renovations can be very challenging. It’s a great way to lose your shirt. This is where Equity Estates leverages our expertise to find long term value—with years of lessons learned now that we are on Fund IV.


Now Is A Great Time To Join

The Phase II Investment round of Fund IV is expected to sell out this month. Wouldn’t you love to diversify your overall holdings with an investment that is both a known hedge against inflation and an enjoyable way to create hassle-free, lasting memories for your family and friends?

We would welcome an opportunity to discuss why now is a great time to invest in Equity Estates.

If you are ready to learn more now, there are incentives for any new investor who acts before the end of the quarter. And if you are not ready, that’s perfectly fine. We will still be here when it’s the right time for you.

Call us at 404.445.8501 or click here to schedule an appointment with one of our Investor Relations Team members.

Until next time, safe travels!

Philip Mekelburg
CEO, Equity Estates

 

Prior to launching Equity Estates about 15 years ago, we met with experts in real estate, hospitality, legal, finance, and tax. We had a novel idea – to supersize the friend-share vacation home concept into a Luxury Residence Fund, where residences would be available to investors for personal use and financial benefit upon sale. We wanted to refine our business model and figure out the fairest way to structure this for all investors. One CPA we met with, Steve Gross, had a memorable reaction, “you have a nice little pony there”. I can still hear his words and mutter them out loud when good things happen at Equity Estates. To this day, it still makes me smile.

Never in my wildest dreams did I imagine a global pandemic would lead to our best sales quarter ever. Now, more than ever, we are reaping the fruits of our labor by finding likeminded investors who agree that Equity Estates is the right way to own and enjoy luxury vacation homes. Our offering makes common sense.

Why now? What’s different? I think you can boil it down to two main factors. First, the combination of global uncertainty with highly overvalued stock indices are leading savvy investors to find new ways to diversify their portfolios. Second, we’ve seen an unprecedented level of demand for private vacation homes among affluent travelers. They want a safe place to go.

The Reality Of Overvalued Stocks And Global Uncertainty

You would be hard pressed to pick up a serious financial publication these days without seeing an article on overvaluation. Here are a few that I found in a quick Google search:


With a global pandemic still lurking around, a growing number of people are looking for safer harbors to ride out a possible “tropical depression” in the financial markets. Luxury real estate is proving to be one of the more attractive vehicles for those who can afford it. It is something they can touch, feel, enjoy. The pandemic pulled at our heart strings by pointing out what is most important and how fleeting life can be. Time with loved ones matters. And yes, people still want to vacation and even work with a better view for extended periods of time. If you move to a resort town, eventually, when the pandemic is behind us, you will want to go back for vacations. If you live in a city, you want to get out and relax on a beach.

The catch, of course, is the ongoing cost and effort of owning and maintaining a second, third or fourth residence.

The Appeal Of Private Vacation Homes

COVID-19 has also succeeded in shining a bright spotlight on one of our company’s best features — privately maintained homes that are well-cared for by a discrete group of people. People who love Equity Estates and see the value immediately are the type who prefer the intimacy of our homes over a large resort or hotel. This is what we do best. We take care of private homes and our investors who travel to them. Many of our destinations have team members have been with us for over ten years. They maintain our portfolio homes to our standards.

My 77-year-old mother, a polio survivor, shared stories of being sent to the Poconos, the Jersey shore, and other vacation spots nearby to get out of the big cities for safety. It’s happening now once again. And while I am confident the cities will all rebound, this Equity Estates “little pony” will be scooping up good deals along the way…in the city, in the mountains and on the beaches.

Now Is A Great Time To Join

Six months ago, at the onset of the pandemic, we were nervous as potential investors who had previously committed to Fund IV abruptly changed their mind. Fast forward to today. Nearly all these people have come back, along with significant numbers of new prospective investors. They took the time to learn about our novel approach to owning and sharing homes, including how we care for them over time…especially now.

We would welcome an opportunity to discuss why now is a great time to invest in Equity Estates. Allocating a small amount out of your equities into a diversified portfolio of luxury real estate assets may pay dividends of outstanding experiences and long-term financial return.

There are incentives for any new investor who acts before Monday, December 7, 2020. This includes unlimited travel for $600 per night and delayed annual dues until you are ready to travel.

Call us at 404.445.8501 or click here to schedule an appointment with one of our Investor Relations Team members.

Until next time, safe travels!

Philip Mekelburg
CEO, Equity Estates