Fractional Home Sales (FHS) is an advisory group that primarily helps homeowners
navigate the process of selling a portion of their vacation home. Many owners of vacation homes may see sharing their home with someone outside of their family and friends as more of a burden than the financial gain, even if the fractional rentals are for only a few weeks per year. FHS helps owners understand the process and financial benefits and provides either specialized services or a comprehensive all-inclusive service package.
Our work includes a broad range of consulting that includes but is not limited to these services:
- Incorporating homes within a Limited Liability Company (LLC). This is often the most practical way to include one or more fractional partners into the ownership.
- Preparing draft Operating Agreements and/or Addendums to existing Operating Agreements, plus investment documents for Fraction Partners (FPs) such as Investor Qualification Questionnaires and Subscription Agreements. These are an excellent way to establish the terms and conditions for the primary homeowner, who is the Majority Partner (MP) and the investor(s) who are FPs.
- Identifying a short list of attorneys to refine the Operating Agreement and other applicable legal documentation.
- Identifying a short list of real estate agents to support the fractional sale offering.
- Identifying a short list of cleaning and linen services, maintenance contractors, and management individuals or companies to streamline the experience for owners and guests.
- Preparing a house for fractional guests on one or more weeks per year. This includes details like establishing a homeowner closet, meeting fire and safety requirements, as well as annual rental registration and inspections that are often required by local municipalities.
- Establishing a rental account with one or more real estate agents and a listing account with services such as Airbnb. This is a key means to set fair market rental rates that are part of the fractional ownership business model.
- Staging and photographing the vacation home as well as description of amenities for the rental and fractional opportunity.
- Providing tips and best-practices to market the rental and fractional offering via traditional and online media as well as search engine optimization and social media.
- Overseeing the management of the property if the owner desires support to optimize the fractional ownership process.
Given that sustainable design and energy saving technology has become increasingly desirable and affordable, we also offer advisory services to help homeowners reach their goals for reducing utility bills and fostering environmental stewardship. This aspect of our advisory has the potential to make the fractional offerings more attractive to a broader range of investors. Lower monthly operating costs increase the return on investment (ROI) for majority and fractional owners.
Our founder, Charlie Szoradi, leads the Fractional Home Sales advisory group. Charlie has over 30 years of experience in real estate. He is an Airbnb “Superhost” for his own vacation home in Stone Harbor, New Jersey, which is also the foundation for the Fraction Home Sales business model. He earned his undergraduate degree in architecture from the University of Virginia and his Masters from the University of Pennsylvania. Charlie’s 1993 master’s thesis focused on Sustainable Design “Eco-Humanism”, and his book Learn from Looking focuses on cost effective sustainability practices and critical thinking.
The origin of Fractional Home Sales came from his personal experience and his drive to set a new paradigm that is applicable for certain owners in certain places, typically with higher than average property costs and rental rates. In short, Charlie has created a new ownership model that limits the number of fractional owners to protect the interest of the primary majority owner. As an example, by bringing in two fractional investors and capping the collective investment at 20% equity in the LLC that holds the property, the majority owner retains well over the majority equity to have property control.
The advisory services include tailoring fractional ownership structures to meet the goals of each majority property owner and their respective family members when applicable to all of the stakeholders.