SOURCE: Midwest Fractionals
MINNEAPOLIS, MN–(Marketwire – July 13, 2010) – We see it over and over again in today’s difficult real estate market. Sellers drop asking prices in 5 and 10% increments while the “For Sale” sign remains in the front yard month after month.
If another 10% drop in asking price won’t move the property, how about 90% instead?
Such a thing is actually possible today through the application of Fractional ownership. In real estate, the Fractional concept has been around for over 20 years, albeit mostly for internationally advertised luxury properties. Now, Fractional ownership is available not only for high-end real estate, but also for mid-market second homes that can be found in attractive vacation destinations nestled in picturesque regions throughout the U.S.
Midwest Fractional Consultants, LLC (www.midwestfractionals.com) is a Minneapolis, MN based firm specializing in Fractional real estate. The company provides consulting services, education and training to buyers and sellers interested in capitalizing on the benefits offered by fractional ownership, including:
- The vast increase in affordability for vacation or second homes
- Radical expansion of the pool of potential buyers
- Ability (unlike timeshares) for any owner to re-sell his fractional share through the MLS
- Spreading out the property’s maintenance, property tax and upkeep expenses
- Retention of tax benefits associated with owning a second home
“Fractional ownership is an ideal way to make things like vacation homes suddenly very affordable,” says Michael W. Peterson, Principal at Midwest Fractionals. “The concept works,” Peterson says, “by dividing ownership in a given property into 4-12 individual shares. Then, a fractional usage schedule is created, which spells out which weeks of the year are deeded to each owner.
“This is a whole new economy, and it requires new strategies,” Peterson went on to say. “With real estate taking such a big hit, Fractional ownership solves a big problem for ‘stuck’ sellers and cost-conscious buyers. Fractional ownership enables buyers to get an increase in luxury for a lower price while sellers get an increase in price because there are more buyers.”
To illustrate the impact of Fractional ownership, Peterson uses a hypothetical $350,000 vacation home. “If an individual buyer wants to acquire it by himself, he’s faced with a $70,000 down payment and a monthly mortgage of over $1,600,” he says. “But instead, if this hypothetical buyer takes a 20% Fractional ownership, he’s looking at a $14,000 down payment and a mortgage of a little over $300 month to get 10 weeks of deeded ownership every year in the same property.”
Midwest Fractionals provides comprehensive consulting services to developers, investors, banks, and builders, among others. The company’s management has over 15 years’ experience in real estate, including four years’ direct involvement in the fractional industry for hotels, resorts and condominiums.
More information is available at Midwest Fractionals’ website, www.midwestfractionals.com, or by calling (612) 435-2145.