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XHow Pacaso Makes It Easier for More People to Own a Second Home
Austin Allison's love of real estate surfaced at age four or five when he would work with a hammer in hand alongside his dad, who was a carpenter.
He bought his first house at age 17 and began selling real estate at 18.
Now, Allison is CEO of Pacaso, a second home co-ownership platform he co-founded in 2020 along with dot.LA chairman and former Zillow Group CEO Spencer Rascoff. Allison was also a Zillow executive.
The idea came to him when he and his wife dreamed of purchasing a second home, and found few options to do so.
"We were like most families who aspire to own a second home but could not afford it at the time," he said.
Allison saw an opportunity and a way to make second homes more affordable through a co-ownership model. He also believed that by consolidating multiple owners in one home, it would help the housing market in these communities by filling second homes year round.
Pacaso co-founder and CEO Austin Allison
The concept of co-ownership isn't new, but unlike "DIY" shared ownership arrangements among family members or friends, Pacaso manages all the details for potential home buyers. Pacaso purchases a home and creates a property-specific LLC. The home is listed through the MLS and on Pacaso's website, and potential buyers can then purchase the share of ownership they want, starting at one-eighth.
Each home has a maximum of eight owners. An owner with a one-eighth share can use their home at least 44 days throughout the year.
Once all shares have been sold, Pacaso transitions to handling ongoing maintenance, LLC oversight, bill payment and scheduling. Pacaso charges an initial service fee, which is a percentage of the home's sale price, and then charges a flat rate of $99/ month per share for its management services.
One of the benefits of buying a home through Pacaso is that buyers can purchase higher-end homes for only a fraction of the cost, making second home ownership more accessible. For example, someone can spend $500,000 to buy a share of a $4 million home. Allison calls this "right sizing" home ownership, because most owners don't need a whole home.
"It doesn't make sense to own 100% of something that you're only going to use 12% of the time, so why not just buy 12%," he said.
George, a Bay Area tech CEO and Pacaso owner in Napa, agrees.
"It was clear the team had really thought about what the shared economy looks like for vacation homes, and what it would look like for me and my wife who want to take advantage of a second home but are busy and active in our work lives," he said. "We're not retired or close to it, so I'm not going to be occupying a second home more than 15% tops. It's a perfect product for someone like me, and that helped us move forward quickly and become owners of a Pacaso home."
Lowering the price of entry for homes in desirable (and pricey) markets is opening up second home ownership to a broader buyer pool. Allison said many Pacaso owners are people in their 40s and 50s with children, and a quarter are non-white and/or part of the LGBTQ community.
Another benefit for owners, especially those who are still working full time or live far away, is not having to worry about the home when they aren't there. Pacaso is responsible for maintenance and management, simplifying the experience of second home ownership.
The model is common in commercial real estate, but not so much in the vacation home industry. It's different than the traditional timeshare structure, which is typically limited to hotels or resorts rather than single-family homes. Timeshare units are shared with up to 52 other people, rather than just seven other families.
Through Pacaso, the buyer owns their share of the property and can sell it on the open market. With a timeshare, residents typically own the right to use the property, not the property itself.
When it comes to wanting to sell the property, the process is similar to whole-home resale. It is listed on the MLS and the value tracks with the local market, which is a huge differentiator from timeshares, which typically lose value.
"One of the biggest hurdles for any buyer is understanding what Pacaso offers that's different from a timeshare. Seeing that there's value in ownership and you get to use it for what you need instead of feeling 'stuck in a timeshare' is hugely important," George said.
In addition to the benefits for buyers, Pacaso's model also helps the housing market at large by removing up to seven buyers from competition for each home. Demand for second homes increased 100% year-over-year in 2020, according to Redfin, as work became remote and people could work from anywhere. This spike in demand was felt in popular second home markets, where buyers were competing for the same homes needed by local residents. The net effect has been less inventory and higher prices.
Because most buyers of whole second homes only plan to use them several weeks out of the year, the homes sit empty most of the time. This means local businesses suffer, because more often than not, there's no one in the home to shop at local stores and patronize restaurants in the community.
Allison and his wife eventually used their savings and purchased a second home in Lake Tahoe in 2014. They became part of the Lake Tahoe community, meeting neighbors and making friends, shopping locally, frequenting restaurants and finding trails to run on.
He said, "It enriched our lives, which is how we came up with the mission of our company: to enrich lives by making second homeownership possible and enjoyable for more people."
"More people should have access to this dream," Allison added. "It shouldn't just be a privilege that's limited to the top 1%. Many tens of millions of additional people should be able to realize the dream. That's why we created the company, and that's what we plan to do across the globe."
At a time when seemingly every social media app is trying to copy TikTok, West Hollywood-based Huddles is going in a different direction.
Huddles, formerly known as Clash, is pivoting away from short-form video feeds and focusing on group chats that let creators talk to—and monetize—their biggest fans. The social media startup rebranded itself last week, using the name of its group chat feature that launched in June.
The app will still include short-form video, but the company said it will remove its “sit and scroll” discovery feed—a feature common on other apps, from TikTok to Triller to Instagram. Creators will upload videos directly to their profiles or Huddles group chats. Fans can pay monthly subscriptions to access paywalled content and private conversations.
“Plenty of distribution platforms and companies are going to try to compete with TikTok, and we have no interest in playing that game,” Co-founder and CEO Brendon McNerney told dot.LA. Although most social media audiences are “passive,” McNerney said there are still “tens of millions of fans who want to actually engage and not just sit there and scroll endlessly. They do love creators, and they want to be in a room with a creator digitally.”
The decision to remove short-form video feeds may seem especially surprising for Huddles, given the startup’s background. McNerney was a creator on Vine, arguably the first major short-form video app. His startup acquired Byte, which was created by Vine co-founder Dom Hofmann and billed as a sequel to Vine.
But after launching the Huddles feature—which can include both public and subscriber-only group chats—the startup said it saw a surge in downloads and creator earnings. More than 10,000 people joined the app within days of the feature’s launch and some creators saw free-to-paid conversion rates of up to 40%, well above the industry average, according to the company. The startup quickly made the decision to center the app on Huddles.
The rebrand required a new name, logo, and updated website, McNerney said. The company, which has raised almost $10 million since its founding in 2019, has also begun more marketing and pursuing partnerships with short-form video distributors. That includes a recently completed deal with Meta, which allows creators to shoot video on Huddles, share it to Facebook and Instagram and link back to their Huddles account. The goal is to incentivise fans to follow their favorite creators onto Huddles. As the social media titans battle to build the biggest audiences, Huddles wants to be the place creators can better engage their fans and, ideally, get them to fork over some money.
To that point, Huddles is now leaning into monthly subscriptions as the primary source of creator revenue. Previously, the app formerly known as Clash emphasized “Drops,” which were essentially one-time tips. Creators have set monthly rates ranging from a couple bucks to $30 per month, McNerney said. More than 5,500 creators are now on Huddles and they have collectively earned more than $130,000, according to the company. Huddles earns money by charging fans purchase fees, currently about 10%, McNerney said.
When the app was called Clash, the startup noticed that fans would spend most of their time trying to send creators “FanMail,” a feature that let people request content, ask questions or direct message creators. That user behavior is what informed the startup’s decision to launch Huddles and ditch the Clash name and video scroll feed.
“It’s a bold move, but it's a step in the right direction,” McNerney said of the rebrand. “It’s a step to what’s already working on the platform. That's why we were so confident in taking the swing.”
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🔦 Spotlight
Hello LA!
While most tech headlines are busy chasing AI chatbots and flying taxis, one startup in El Segundo is aiming a little higher. Literally.
Rainmaker just secured$25 million in Series A funding to expand its cloud-seeding drone technology. The round was led by Lowercarbon Capital, with participation from Starship Ventures, 1517 Fund, Long Journey Ventures, Naval Ravikant, and others.
Their idea is simple but urgent. Instead of relying on old-school aircraft to spray rain-making particles across the sky, Rainmaker uses AI-powered drones that find and seed clouds with pinpoint accuracy. It is faster, more affordable, and could reshape how regions fight back against droughts.
California's ongoing water struggles have made it clear that simply "saving" water is not enough. Cities and entire economies need new tools to create it. Rainmaker plans to use the funding to grow its fleet, invest in atmospheric science, and expand commercial partnerships with utilities and governments searching for solutions.
Bigger picture, Rainmaker is part of a growing shift in LA's tech ecosystem. While software remains dominant, more investors and founders are quietly betting on "hard tech" that addresses real-world problems like water, energy, and infrastructure.
It is not just about apps anymore. It is about survival tech.
With the skies getting hotter and the reservoirs getting lower, the next great tech export out of LA might not be entertainment or social media. It could be rain.
Stay tuned…
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LA Exits
- StoryFire, a social storytelling and video platform with over 2.5M users, has been acquired by Flashy Finance to launch a new platform called Flashy Social. The move aims to merge content creation with blockchain-powered financial tools, allowing creators to monetize through token incentives, streaming features, and community engagement. This acquisition supports Flashy Finance’s broader vision of building a cultural, creator-led financial ecosystem. - learn more
- Jaanuu, Inc., a Los Angeles-based medical apparel brand known for its stylish and functional scrubs, has been acquired in an asset sale by VentureOn Management, LLC. The acquisition includes substantially all of Jaanuu's assets, encompassing its intellectual property, inventory, and customer relationships. VentureOn Management plans to continue Jaanuu's operations, focusing on delivering high-quality medical apparel to healthcare professionals. - learn more
- Skechers has agreed to be acquired by 3G Capital in a deal valued at approximately $9.4 billion. Shareholders will receive either $63 per share in cash or $57 plus an equity unit in a new private parent company. Following the acquisition, Skechers will become privately held, maintain its Manhattan Beach headquarters, and continue to be led by its current management team. - learn more
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