Late last year, Spencer Rascoff, the former CEO of Zillow, reached out and invited me to be part of a new advisory board for his latest real estate start-up, Pacaso. I knew Spencer when he was at Zillow and we kept in touch over the years. I don’t sit on many advisory boards, but I thought the idea behind Pacaso was pretty cool and I agreed to participate. In a nutshell, Pacaso makes second homeownership more accessible by allowing buyers to purchase shares in a vacation home rather than having to purchase the entire property. It works like this: Pacaso purchases the home, then sells ownership shares of a limited liability company to up to eight individuals who share ownership and occupy the property at different times, proportionately. Pacaso manages the properties including moving in and out the personal property of each owner when they stay in the property. Financing is available, and a buyer can purchase a share of a $3.2M property in markets like Napa Valley, Park City, Malibu, and Palm Springs for as little as $400K. Potentially, this can make second homeownership much more attainable for a lot of people.
Spencer started the company with Dotloop founder Austin Allison who serves as the company’s CEO. The latest round of financing valued the company at roughly $1 Billion, making it the fastest company in U.S. history to achieve so-called unicorn status. Pacaso says that second homes sit vacant more than 90% of the time, while Pacaso properties are occupied year-round, which is safer for communities, and more supportive of local businesses such as restaurants, grocery stores, and beauty salons. It makes a lot of sense. The biggest challenge for Pacaso is convincing local residents and municipalities that they are not a timeshare company or just another Airbnb. I recently spoke at a city council meeting on behalf of the company and did my best to make the case that Pacaso lowers barriers for buyers, improves local economies, and adds diversity to communities that are not always known for it. Pacaso also lists their properties on the MLS and pays commissions to real estate agents.
Besides supporting what I think is a good business, I’m enjoying watching two elite entrepreneurs build a world-class start-up. These guys know how to play at the big table, but I can also tell you that Austin and Spencer have an appealing combination of intelligence and humility. They are both young and incredibly successful, but always seem to be eager to listen and learn. I have no doubt that Pacaso will continue to be successful and I look forward to helping out.
Over the last few weeks, I have had the opportunity to speak at the T3 Conference in Florida…I surprised the audience when I explained how the issue of diversity has been framed incorrectly, and has for the most part alienated the business community.
Elon Musk dropped by the Real Time with Bill Maher show recently for an interview with the host. Maher, who considers himself a liberal is an obvious fan of the CEO of Tesla and Space X. The centerpiece of their conversation was their discussion regarding what Musk called the “woke mind virus” or what I prefer to call “cancel culture”.
People sometimes get me wrong. They think that because I talk a lot about giving back and living modestly, I must not care about money. On the contrary, I care a lot about money because I understand how our system works.