Tell someone you own a Pacaso and you’ll probably see their eyebrows raise in a show of curiosity. But tell someone around Lake Tahoe that you just bought a Pacaso and perhaps you’ll be greeted with a smile and a welcome to the community. At least that’s what the company’s founder anticipates will be the case.
Former Zillow executive Austin Allison thought the greater Lake Tahoe housing market would be a perfect fit for a new venture he co-founded called Pacaso. It’s a service that connects potential second homebuyers to partner in purchasing a home. Inspired by the great painter Pablo Picasso, the Pacaso of real estate follows the artist in more than just name.
“[Picasso] was obviously a revolutionary and pretty legendary creator, but one of the things that he was known for creating is the style of art called cubism, which is about bringing together these individual pieces to create a beautiful whole,” Allison explained during a recent interview with Moonshine Ink.
“And that’s what Pacaso does through co-ownership. We bring together a few families to participate in this beautiful thing known as second homeownership. We also just kind of like the sound of it … when you tell somebody you own a Pacaso in Lake Tahoe, their head turns and it invites conversation.”
As a Lake Tahoe second homeowner himself, Allison is familiar with the challenges of purchasing a vacation home and says that the concept of Pacaso was really created right here.
“My wife and I were fortunate enough to buy our second home in 2014 and at that time it was a real stretch for us financially to swing it,” he recalled. “And the only way we were able to swing it was by renting the home out part of the time to help pay the mortgage at that time.”
Allison said second homeownership is truly special and a privilege, one that has afforded him and his wife to become part of the community by meeting new friends and getting to know people like the owners of restaurants they frequent. He also knows it’s out of reach for most folks, largely due to cost.
“It doesn’t make sense that someone would own 100% of a home that they’re only going to use 20% of the time,” he said, explaining that most second homes are underutilized, sitting vacant for 10 to 11 months out of the year if they’re not being rented out.
And short-term rentals, he adds, are not for everybody.
“It’s just a real hassle — for the neighborhood as well as the owner and the community at large,” he continued, noting that temporary renters come in with a “renter mindset” and are notorious for not following rules. “I got to experience that firsthand, and that really triggered this idea for Pacaso, which is: What if we could make it possible for more people to truly own a second home and enjoy the second home benefits as an owner and not a renter? And Lake Tahoe is frankly the perfect place for that because it’s a beautiful destination that many people aspire to be part of and enjoy but it’s very out of reach because of home prices. So, we have a solution that makes it possible now for more people.”
The concept behind Pacaso is really nothing new: LLC ownership.
“What Pacaso does that’s different, though, is we make LLC ownership very easy,” he said. “We handle everything from creating the LLC to providing software tools that enable the owners to manage the home and their calendar, to paying all the bills and dealing with repairs and maintenance.”
The process of converting a whole home to a Pacaso is facilitated through buying a home on the open market and then aggregating families who are interested in owning that home and bringing them together through the ownership group. Once the process is complete, Pacaso retains no interest but does continue to handle all that goes with homeownership and has partnered with a variety of local property management and maintenance businesses, helping to keep local the dollars spent.
“We’re very intentional about working with local managers, for example, supporting local businesses … promoting local businesses to the owners,” Allison said. “And anything else that we can do to engage with the community in a positive way, we’re trying to do that, and our ears are open.”
Allison feels that Pacaso will be a positive for Tahoe’s housing market, driving potential buyers to more expensive homes, thereby easing the pressure on homes in the middle and lower price ranges. There is also a strict no-rent clause in the contract, preventing Pacaso homes from becoming STRs.
Pacaso’s Second Home Sentiment Report found that Americans who do not already own a second home are much more likely to want one today compared to before the pandemic. According to the findings, “more than half (55.7%) say they desire to own a second home, compared with 46.4% before COVID-19.” Currently, Lake Tahoe and Napa Valley are Pacaso’s two biggest markets, and although the main focus remains on the West Coast, there are a few other areas of interest across the country. The eventual goal is to expand worldwide over the next few years.
“Our mission at Pacaso is to enrich people’s lives through second homeownership,” he said. “And the two most important words in that sentence are ‘enriching lives.’”