By Edmond Krafchow
Former CEO and Co-Owner Prudential California Realty
President and Owner Mason-McDuffie Real Estate
2012 RISMedia Real Estate Leadership Award Recipient
Ever since I was a child I have been in love with Hawaii. Sometime in the 1940’s I remember my parents bringing home a Matson Lines’ menu from a cruise they took to the islands.
How did I end up owning 5 acres in Maui?” Much of the agriculture had left the islands at the turn of the century. It was in this environment that the old sugar cane fields were broken into smaller plots of land to be sold to the “new explorers” “the New citizenry” of Maui. The results-- much of these 5-acre parcels were bought and developed by 2006. These properties were built by the “Ultra” rich and have some of the finest amenities you can find on Maui. Then the real estate downturn hit in 2007. The market didn’t return until 2012.
On my street today there are just two full-time residents out of the eight parcels that are owned by full-time residents. The result -- a glut of multi-million-dollar properties coming onto the market and languishing there while listing prices plunge. The problem—there are not many buyers who want to spend $10 million just to use the property for short periods to time.
Here’s where Lifestyle Asset Group comes into play as a solution. Having been in the real estate industry for over 30 years I have been very reluctant to endorse any real estate product such as timeshares. Lifestyle Asset Group is not selling timeshares. It follows a direct process of ownership of the property through an LLC structure. That LLC owns nothing other than that particular property that the LLC owns and manages.
This is a company that has a model that it has successfully used and follows rigorously for the last five years. Lifestyle Asset Group has multiple properties and is on a managed growth trajectory. Finally, the management team is knowledgeable about the local environment and uses a credible approach to offering, these properties.
Buyer Advantages
- You consume a portion of the ownership in staycations, and it is an investment into your family as well as an investment that will return to you perhaps more than you invested with your capital.
- Rich Keith, Senior Partner of Lifestyle Asset Group explains, “our business model involves owners, real owners. They are individuals who care about the property, the community, the people, and are not just folks that are visiting for a week every 2 or 3 years. This concept is how we created Lifestyle Asset Group and has stuck with our clients who have the same belief. And I believe that this ownership concept is particularly important in a place like Hawaii where the cultural paradigm is so profound and important.”
- The buyer has the opportunity to own an “ultra-rich” property with an investment that could return itself and more.
- The last time I checked the cost at the Montage at Kapalua Bay for a 4-bedroom suite was $4,000 a night. If you stayed for 10 nights, you have just spent $40,000 and you have nothing to show for it other than some hotel points! Your cost per night to stay in a $7m, 6 bdrm, 7 bath, 5,277 sq foot house is only $671/night! (after your initial investment). That is a ROI that surely must be contemplated.
- Lifestyle Asset Group delivers a five-star concierge experience.
- Your investment is structured with an exit plan in place. In 7 years, the home is sold on the market as whole ownership and at market price. Once sold, the LLC investors will get their original capital returned, plus their share of any appreciation that may have occurred over the 7-year term
Seller Advantages
- The seller of a Lifestyle Asset Group offering has a larger pool of potential buyers. Consider--If you are selling only to prospects who can afford to buy a multi-million-dollar property, then you are in a smaller market. “There are certainly more buyers who want to invest $1m than there are buyers who want to invest $7m in a vacation home located thousands of miles away.
- The seller can repurchase a portion of the transaction and retain a percentage of ownership to revisit their own property. The seller can stay in the deal and retain an ownership percentage of the house, but walk away from all the hassles.
I am both a seller and a buyer of my own property here on Maui with Lifestyle Asset Group. I am looking forward to the time I can spend on my property. Rich Keith and Lifestyle Asset Group have provided the perfect solution to my problem both for my family and financially.
