4 ms·

I don't think fractional ownership is a silicon valley creation? What makes you say that? Similarly, how are real estate agents a guard on investing? I'm not

by taeric 3y ago

I don't think fractional ownership is a silicon valley creation? What makes you say that? Similarly, how are real estate agents a guard on investing? I'm not convinced they are bad, mind you. Curious on your angle, though.

gkfasdfasdf 3y ago
Check out https://lofty.ai https://lofty.ai. Fractional, income-generating real estate, including the tax benefits (which you can't get with REIT).
- rickydroll 3y ago
  lofty is simultaneously horrifying and attractive. Rent seeking is an abomination it is the only way to build a financial future. Work doesn't pay enough. I've often felt that trading stocks and real estate investing like this is benefiting from other people's debt. which raises the interesting question. If you were to live according to Dave Ramsey's debt is evil philosophy and everybody got rid of debt, where would you put your money to build for the future?
- taeric 3y ago
  My question is more of why this is seen as SV making this more common. That there are starting to be some SV companies that are doing this is evidence, I suppose. They still seem to be in the vast minority of the companies that offer it, though. Feels like saying SV encourages payday loans, because there are some that exist there.
- noSyncCloud 3y ago
  Fwiw, this is using USDC as a currency. Your deposits are automatically converted.
surfmike 3y ago
This company has been extending fractional ownership to a lot of communities in California. https://en.m.wikipedia.org/wiki/Pacaso https://en.m.wikipedia.org/wiki/Pacaso
- drt5b7j 3y ago
  > Pacaso is a property broker that buys single-family homes and sells them to consortiums of buyers. Why not just buy a REIT?
  - 4death4 3y ago
    Why not just buy fractional shares of a property?
    - drt5b7j 3y ago
      Your comment doesn't really answer my question... you just typed the same observation from the other side. You've added nothing. Zero value.
      - 4death4 3y ago
        I contributed the same value as you. Owning property and owning a REIT have very little in common other than a correlation in market value.
    - JumpCrisscross 3y ago
      > Why not just buy fractional shares of a property? Transaction costs for diversification. The same reason it makes sense to buy ETFs versus directly balance your own portfolio for anything below your first million.
      - 4death4 3y ago
        But owning a REIT is nothing like owning property. Sure, REITs and investment properties both derive cash flows from rent, but the similarities stop there. In general, asking “why not X instead of Y” without giving reasons why X is preferable over Y is just a waste of everyone’s time.
        JumpCrisscross 3y ago
throwaway290 3y ago
That comment didn't claim it was an SV creation, it can be read as SV made it easier and more popular so it made real estate more of an investment in general. Perhaps fractional ownership was used in limited circumstances before, but some tech co thought they can make it mainstream and didn't stop to think if they should. Cue unforeseen consequences.
- taeric 3y ago
  I mean... sure, a silicon valley company is offering fractional ownership. I don't see how that supports silicon valley making housing more of an investment. But, sure, dunk on a common boogie man.
  - throwaway290 3y ago
    Kinda like ClosedAI. Let's do this because we can and it's profitable (shareholders) and cool (software engineers). People lose jobs? That's just life man, I mean we do get to keep ours so...
    - gorlilla 3y ago
      Not a problem as long as it stays _other_ people.
      - throwaway290 3y ago
        let them all retrain as baristas while we are figuring that one out... /s
iisan7 3y ago
Other commenters mostly made the points I had in mind about companies in the fractional ownership space. Regarding agents dampening investment in housing, I had on mind the fact that the transaction costs of 6% or so when selling makes housing an unattractive short term investment. If that wasn't there I think there'd be more incentive to speculate in housing markets.
- taeric 3y ago
  I doubt that, personally. Especially back when people could dream of larger returns as illustrated on many TV shows, I seriously doubt 6% even registered on most people. Seems the main thing holding back more folks was lack of capital. Not fear of 6%. Would be interesting to see data on this. Didn't Redfin have a reduced commission path? Any evidence that led to more speculation?
  - neeleshs 3y ago
    If you look at it as an investment and profits, it's not 6% anymore, but a much larger percentage of your profits. I buy a house for 100,000, incur about 5k in government, administrative fees. Sell it for 125k, netting 20k - less if you consider insurance and property taxes. So let's say 18k. But I've paid the realtor 6% on 125k. That's 7.5k. That's a whopping 41.67% of profits
    - WalterBright 3y ago
      Most people seem to just ignore the costs of transacting a house. They'll say they bought a a 100,000 house and sold it for 125,000 and say they made 25,000 in profits. Neglecting the fees, commissions, insurance, loan points, repairs, time, taxes, the cost of the house sitting there vacant, etc. Houses are historically lousy investments.
      - dotancohen 3y ago
        > Houses are historically lousy investments. Yes, but land is an historically safe investment. However very often in well-developed areas, it is difficult to acquire one without the other.

by taeric 3y ago

gkfasdfasdf 3y ago

Check out https://lofty.ai https://lofty.ai. Fractional, income-generating real estate, including the tax benefits (which you can't get with REIT).

rickydroll 3y ago
lofty is simultaneously horrifying and attractive. Rent seeking is an abomination it is the only way to build a financial future. Work doesn't pay enough. I've often felt that trading stocks and real estate investing like this is benefiting from other people's debt. which raises the interesting question. If you were to live according to Dave Ramsey's debt is evil philosophy and everybody got rid of debt, where would you put your money to build for the future?
taeric 3y ago
My question is more of why this is seen as SV making this more common. That there are starting to be some SV companies that are doing this is evidence, I suppose. They still seem to be in the vast minority of the companies that offer it, though. Feels like saying SV encourages payday loans, because there are some that exist there.
noSyncCloud 3y ago
Fwiw, this is using USDC as a currency. Your deposits are automatically converted.

surfmike 3y ago

This company has been extending fractional ownership to a lot of communities in California. https://en.m.wikipedia.org/wiki/Pacaso https://en.m.wikipedia.org/wiki/Pacaso

drt5b7j 3y ago
> Pacaso is a property broker that buys single-family homes and sells them to consortiums of buyers. Why not just buy a REIT?
- 4death4 3y ago
  Why not just buy fractional shares of a property?
  - drt5b7j 3y ago
    Your comment doesn't really answer my question... you just typed the same observation from the other side. You've added nothing. Zero value.
    - 4death4 3y ago
      I contributed the same value as you. Owning property and owning a REIT have very little in common other than a correlation in market value.
  - JumpCrisscross 3y ago
    > Why not just buy fractional shares of a property? Transaction costs for diversification. The same reason it makes sense to buy ETFs versus directly balance your own portfolio for anything below your first million.
    - 4death4 3y ago
      But owning a REIT is nothing like owning property. Sure, REITs and investment properties both derive cash flows from rent, but the similarities stop there. In general, asking “why not X instead of Y” without giving reasons why X is preferable over Y is just a waste of everyone’s time.
      - JumpCrisscross 3y ago

throwaway290 3y ago

That comment didn't claim it was an SV creation, it can be read as SV made it easier and more popular so it made real estate more of an investment in general. Perhaps fractional ownership was used in limited circumstances before, but some tech co thought they can make it mainstream and didn't stop to think if they should. Cue unforeseen consequences.

taeric 3y ago
I mean... sure, a silicon valley company is offering fractional ownership. I don't see how that supports silicon valley making housing more of an investment. But, sure, dunk on a common boogie man.
- throwaway290 3y ago
  Kinda like ClosedAI. Let's do this because we can and it's profitable (shareholders) and cool (software engineers). People lose jobs? That's just life man, I mean we do get to keep ours so...
  - gorlilla 3y ago
    Not a problem as long as it stays _other_ people.
    - throwaway290 3y ago
      let them all retrain as baristas while we are figuring that one out... /s

iisan7 3y ago

Other commenters mostly made the points I had in mind about companies in the fractional ownership space. Regarding agents dampening investment in housing, I had on mind the fact that the transaction costs of 6% or so when selling makes housing an unattractive short term investment. If that wasn't there I think there'd be more incentive to speculate in housing markets.

taeric 3y ago
I doubt that, personally. Especially back when people could dream of larger returns as illustrated on many TV shows, I seriously doubt 6% even registered on most people. Seems the main thing holding back more folks was lack of capital. Not fear of 6%. Would be interesting to see data on this. Didn't Redfin have a reduced commission path? Any evidence that led to more speculation?
- neeleshs 3y ago
  If you look at it as an investment and profits, it's not 6% anymore, but a much larger percentage of your profits. I buy a house for 100,000, incur about 5k in government, administrative fees. Sell it for 125k, netting 20k - less if you consider insurance and property taxes. So let's say 18k. But I've paid the realtor 6% on 125k. That's 7.5k. That's a whopping 41.67% of profits
  - WalterBright 3y ago
    Most people seem to just ignore the costs of transacting a house. They'll say they bought a a 100,000 house and sold it for 125,000 and say they made 25,000 in profits. Neglecting the fees, commissions, insurance, loan points, repairs, time, taxes, the cost of the house sitting there vacant, etc. Houses are historically lousy investments.
    - dotancohen 3y ago
      > Houses are historically lousy investments. Yes, but land is an historically safe investment. However very often in well-developed areas, it is difficult to acquire one without the other.