An investor from Northern California shares how he and his wife evaluated Equity Residences Platinum Fund. He also discusses some of his traveling experiences as a Platinum Fund investor.
Andrew H., successful entrepreneur and father of four, discusses his investment in Equity Residences.
Andrew was looking to spend quality vacation time with his his wife and four young children. He invests in real estate for his business, but is not excited about the costs, management headaches or limited flexibility associated with traditional vacation home ownership. He has also tried VRBO and vacation rentals, but has experienced mixed results, saying "it's hit and miss, you get some good ones and you get some bad ones".
Two Silicon Valley attorneys, Trina and Philip O, discuss why they invested in Equity Residences.
It's interesting to learn how they first came across Equity Residences. Trina was looking on VRBO for a vacation rental in Maui and came across the Equity Residences villa. As she looked into the company that owned the villa, she and Philip became interested in the company and started to do their due diligence for investing, noting:
I actually did a lot of research on other funds as well, that have done similar things, but I think this fund, equity residences is totally different from the others because of the focus not only on providing amazing luxury vacation experiences, but also on the economics and the returns to investors, so the fact that we don't have an annual operating fee and they rent the properties out when they are not in use by partners, was a very compelling reason for us. The other funds in this space do not do that.
Philip discussed his views on the fund structure:
I think the sort of introspective thinking they've done about how the fund should work, and making sure that if you don't have time to take a vacations they will even continue to kind of pay you a dividend, is really a creative approach to getting investors to put their money into a partnership like this. Even if they are not going to be able to maximize their vacationing. And so by providing an economic return through a dividend in lieu of taking vacation weeks, it's really a creative approach in my mind to making the economics work for everybody.
Philip really summed up his views on the investment aspect by saying:
I just encourage people to check it out, you know, it depends on what's the best fit for you, but when we're looking for a different way to vacation, this was interesting to us because we're going to pay someone anyway, to vacation, whether it's a hotel or you know getting a place on VRBO. So to the extent that we could use our investment, leverage our investment and get it to be less expensive to be able to stay in a place but also enjoy much nicer places.
In talking about their vacations at the fund homes, Trina states:
The opportunity for us to invite family and friends, to vacation with us, you know it's sort of my dream, but before equity residences it was hard to make it happen, because everybody had a different opinion or idea on where they wanted to go and how much we should spend. And now for us we can now say, hey we have got these great properties come join us, you don't have to spend a dime on lodging and so that's made it a lot easier for us to connect with family and friends.
And commenting specifically on their stay at the funds Park City residence:
Park City is fantastic, there's I think 6 bedrooms on over 4 or 5 different floors. We cooked meals, we were there for a week, 6 out of 7 nights we cooked and we took turns cooking. Had great conversations around the dinner table, which seats 10 or 12. So It was fantastic, really good experience.
Watch the full interviews in the video above.
Meesh P of Newport Beach, CA is an investor in Equity Residences Villa Fund and recently talked about why she invested in the fund.
Without holding anything back Meesh notes:
"These properties are stunning, they are truly beautiful, they are perfectly appointed and they fit, sometimes two even up to four families, which is great because, with young children we are actually travelling a lot with our friends."
"One of the best things that we really like about the property is that we are not actually managing these properties ourselves, so we don't have to worry about the broken toilets, and the light bulbs and any plumbing issues that are happening. The fund is actually managing it, they have their own property management system, that works perfectly and so as a property owner I'm not even having to worry about any of that."
"We are really, really looking forward to going to the Big Island, so the latest property that was purchased, there's one in Palm Beach Shores, that'll be great when we go East and we can have Grandma meet us down there and then another great property is on the Big Island. Which is, I think, it's a 5 or 6 bedroom. Every room has an ocean view, it's a gated community right over Kona and it has a sick indoor kitchen and a great outdoor kitchen with a pool. So, totally looking forward to bringing some friends with us on that trip and having a great time over spring break."
"Another really great perk is the Elite Alliance partnership which actually unlocks about 50 properties worldwide, without having to trade in our weeks from our investment we can actually look to see if there are any last minute deals."
Rentals Cover Operating Costs
"Also, they are really, really good at identifying properties that are going to be excellent in rental market situations, because they hold a percentage of the inventory of all the properties in the asset portfolio for rental on VRBO."
"When the properties are rented out, it kicks off enough cash to cover all of the annual operating expenses, so that in fact as an investor I haven't had any annual operating fees or any additional costs to put in besides my initial investment."
"In fact we have some friends in the fund who don't even take vacations through Equity Residences, what they do is put their weeks into the vacation pool and they are actually getting dividends back every single year."
To see all her comments watch the video above.
Graham Pierce, Managing Partner of Beacon Point Advisors, shares thoughts on his investment with Equity Residences. In this video he discusses using the sizable properties for family travel and the expanded vacation experience with Elite Alliance. He also discusses the attractiveness of the investment to maximize return on investment, diversify your portfolio, and the attractiveness of not paying high annual fees.
Some of his points include:
"We liked it for a few reasons, it allows the firms partners, options for family travel. Travel that we can bring not just family but friends as well. The properties are sizable enough to be able to do that."
"Their investment process too we found thoughtful. Most of the luxury home primary residence, a lot of that has really rallied and comeback, but the luxury home market for secondary homes, vacation homes, there's still a lot of opportunity there, and they have been thoughtful about it by both identifying properties in locations that kind of expand the vacation experience and at the same time focus on what's really more important to us, is maximizing the return on investment."
"I'd say, what I'm most looking forward to with respect to the properties, and the investment, is actually a property that my twin brother is going to in Hawaii. It's actually on the North Shore of Maui, Kapalua and him being a big surfer and big golfer, and the swells being big on the north shore at this time in December, he's going there for his honeymoon and we're excited about being able to give that to him."