Second home mortgage: How it differs from an FHA loan

Explore how Pacaso simplifies international property ownership for buyers, offering a seamless experience to own luxury properties in top global destinations such as Paris, London, and Cabo. In our recent webinar, Pacaso's SVP of New Development, Head of Sales for Mexico and Senior Director of European Expansion take a deep dive into the ease and benefits of Key takeaways include:

What does "property ownership" entail? Property ownership goes beyond merely acquiring real estate and registering it under one's name. It encompasses various forms and structures, each with its unique practical, financial and legal implications. Depending on the chosen type of ownership, individuals may encounter different estate planning challenges and tax liabilities. It's essential to understand these nuances, as they can significantly impact future events, including inheritance or tax assessments. Keep in mind that these are just suggestions, and your situation might call for something else. If you’re unsure which property type will work best, explore your options with a real estate attorney. 1. Sole ownership Type of owner: individuals As the name implies, sole ownership is when an individual is the only property owner. Since they are the only owner, they don’t require anyone’s consent to sell, lease or transfer the property to another person. Property owned by a sole owner is sent into probate when the owner dies until the will is validated. 2. Joint tenancy with rights of survivorship (JTWROS) Type of owner: married couples The most common form of property ownership for married couples is joint tenancy with rights of survivorship, which awards both parties undivided ownership. Both parties have equal liability and financial responsibility for the property, including the cost of upkeep and repairs, as well as equal rights to access the property. In JTWROS, one owner may sell or transfer their portion of the property without the consent of the other owner.  3. Tenants by the entirety (TBE) Type of owner: married couples Married couples may instead opt to own property as tenants by the entirety, which is the same as JTWROS, except an owner can do nothing with their ownership portion without consent from their spouse, since the couple is legally considered one entity. Divorce will automatically change the ownership agreement to tenants in common. 4. Community property Type of owner: married couples Only 10 U.S. states are community property states. This real estate ownership type classifies any property obtained by a spouse during marriage as “community property” — that is, owned by both spouses, even if the property is only listed in the name of one spouse. This includes all real estate purchases made during the marriage.  The states that recognize community property include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In Alaska, residents can opt in to a community property agreement. The same community property laws apply to registered domestic partnerships in California, Nevada and Washington. 5. Owning trust Type of owner: minor children or adult with disabilities An owning trust entrusts the care and management of a property to a trustee acting on behalf of someone else, usually a child or an adult with special needs. A living trust is established while the original owner (also called a trustor or grantor) is still alive. The trustor names the beneficiary as the owner of the property, but until the trustor’s death, they also serve as the trustee. The property remains in the beneficiary’s name, but a new trustee is selected (usually named by the trust) to keep the property out of probate. 6. Tenancy in common (TIC) Type of owner: unrelated multiple owners of a single property When owning property as a Each tenant is allowed to sell, will or otherwise transfer their ownership share without the permission of the other owners since they lack survivorship rights. When a tenant dies, their ownership passes into probate before being transferred to any named heirs. 7. Owning partnership/LLC or co-ownership Type of owner: unrelated multiple owners of a single property Properties can be organized into a Owners can create the LLC by What’s right for you? Different types of ownership in real estate can offer different benefits to owners. If you’re still not sure which type of real estate ownership is right for you and your situation, it’s a good idea to consult a legal professional.  How to become a co-owner of a second home Pacaso makes it possible for individuals to become co-owners of a In Pacaso’s ownership model, an LLC ensures true property ownership for each member. Unlike a timeshare when you only pay for time to use a property, Pacaso ensures you enjoy the many benefits of second home ownership

International real estate has its benefits, but the complexities can be intimidating and risky. From navigating legal regulations and language barriers to working with local vendors and securing financing, buying a home abroad requires careful consideration and expert guidance. If you’re an U.S. citizen looking to Reasons to search international real estate Just like owning a second home in the United States can provide benefits like equity appreciation and having your personal retreat, so does owning an international second home. Below are some benefits  for Americans 1. Travel and exploration Buying property overseas instantly provides you with a place to call home in a new destination, whether that's a flat in London or a beach escape in Mexico. Overall, property ownership lets you explore a new culture and way of life. Rather than coordinating expensive hotel stays every time you want to travel abroad, buying a house in another country means you have your own place to stay.  2. Cost savings compared to the U.S. market The U.S. housing market can be extremely competitive and expensive, so buying a house abroad may save you money. Many countries have lower property prices, allowing you to stretch your budget. This can make it possible to own a luxury home in a foreign location for roughly the same price as a starter home in the United States.  3. Lower cost of living Aside from lower property costs, things like groceries, dining out, utilities and transportation can also be lower than in the United States. This means that owning a property abroad could allow you to enjoy a more comfortable lifestyle for less than you’d pay back home.  4. Fast-track to residency Some countries offer residency programs specifically for foreign property buyers. If you own property that meets certain criteria, you may have an easier time gaining residency, allowing you to spend extended time in your home abroad. This can be a great option for those considering retiring abroad or wanting to make their Tips for buying property abroad U.S. buyers of a home abroad need to consider both tax regulations and  financing. Foreign buyers often face obstacles in securing a loan because they can be perceived as high-risk by local banks and international home loan lenders.  Pacaso’s LLC ownership model is structured to minimize tax burdens and ensure compliance with local regulations. While we recommend you consult your tax professional for more personalized advice, our team can work with them and provide general guidance on 1. Consult your financial advisor Before buying international real estate, consult a financial advisor specializing in foreign real estate. They can help you take a holistic approach, considering your financial goals, and the risks and rewards of owning a home abroad. An advisor can also guide you on currency exchange rates, tax implications and estate planning considerations.  2. Research the country’s real estate process Every country has its own real estate process, from property search and negotiation to closing and ownership transfer. Always research the specific process in your chosen country to know what to expect. Things to look into include local customs, legal requirements and tax implications. Also, find out about any specific documentation or permits that may be required.  3. Find local representation Learning how to invest in 4. Review residency requirements If you plan to spend extended time in your vacation home, you’ll want to understand the country’s visitor and residency requirements. Some countries may have specific visa programs for foreign property owners, while others may restrict your stay without obtaining a visa. Research the residency options available or ask your local agent to help you find the option that best suits your needs.  5. Discover other options to finance an overseas property While Pacaso offers financing options for our properties, you can finance an overseas property in other ways. Consider exploring options like cash purchases or private lenders that may provide financing for foreign purchasers. Research your options and lean on your local agent and financial advisor to determine the best option for your financial situation.  Things to consider with foreign real estate Consider the following factors when learning how to buy a house in another country. Laws and eligibility It’s crucial to understand the local laws and regulations governing international real estate. Research the specific requirements and restrictions for foreign buyers before making any decisions. Your local agent or financial advisor can also guide you on property taxes and any other potential restrictions to be aware of.  Language barriers Unless you’re fluent in the local language, think about how you will communicate in your country of choice — especially with agents and local authorities during the purchasing process. You may decide to hire a translator to assist with things like negotiations and paperwork unless you find a local agent who speaks your language.   Difference in currency Investing in foreign real estate involves dealing with different currencies. Fluctuations in exchange rates can impact the value of your home and potentially increase or decrease your return. Stay informed about currency trends as you navigate your purchase.  Culture  Understanding the country's culture where you plan to buy a second home is essential. Research things like the country’s political stability, social customs and overall feel for various regions or neighborhoods. Be aware of cultural faux pas or scams targeting foreign buyers.  Confidently buy a vacation property abroad with Pacaso Ready to find your dream vacation home? Contact our team to explore our curated

This webinar will walk you through everything from how to schedule stays to tips on using our new swap feature, ensuring you can secure the dates you desire. This is the perfect opportunity to get all your questions answered and see how effortless co-ownership can be.

Savvy investors know that portfolio diversification can be a key to long-term investment success. For that reason, investors should understand the variety of investment opportunities open to them. One exciting option for investors, offered via Regulation A+ (“Reg A”), enables individuals to invest in businesses that aren’t yet publicly traded. Reg A gives companies the framework to publicly offer securities without the rigorous and costly process of a traditional initial public offering (“IPO”). Here is what potential investors should know about Reg A. What is Regulation A? At a high level, Reg A is a regulation adopted by the Securities and Exchange Commission (“SEC”) that allows private companies to raise capital from the public. The recently updated regulation, which is an exemption from registration under the Securities Act of 1933, helps democratize the investment landscape by opening the door for the general public to invest in private companies. Reg A gives individual investors a chance to invest in opportunities historically open only to institutional and angel investors. Due to its structure, many types of companies can use Reg A to raise money. Reg A offerings are a popular choice for technology companies seeking to fund business growth or product development, for consumer goods companies looking to expand their product line, and for real estate developers funding property acquisition.  Reg A offerings are typically launched by companies that focus on select industries or have niche fundraising structures. For example, in the real estate context, many companies elect to use Reg A offerings to fund their real estate investment trust (“REIT”). In a REIT, pooled investor funds are often used to invest in a portfolio of real estate assets. Reg A provides a streamlined way for the REIT to raise money from the public and efficiently acquire the real estate assets. Types of Reg A offerings  As set out by the SEC, Reg A offerings can be completed under one of two tiers. The two tiers have different reporting requirements and authorize companies to raise different amounts of money. The regulation provides more flexibility for companies seeking to raise while ensuring investors receive adequate information from the company raising. Tier 1 Companies can use a Tier 1 Reg A offering to raise up to $20 million over 12 months. The company must file a Form 1-A offering statement with the SEC, including the company’s financial statements. In most cases, Tier 1 offerings do not require audited financial statements, but the SEC has outlined cases where audited financials may be required. Though Reg A is a federal regulation, companies using Tier 1 usually need to file state-by-state registrations in each state where they intend to sell securities. The offering will likely be subject to review by those states under state-specific Blue Sky laws. After the offering, companies must file an exit report 30 days after the offering closes, but are not required to submit annual or semi-annual updates to investors. Overall, given the $20 million raise limit, the Tier 1 requirements are lighter than those for Tier 2. Tier 2 Tier 2 Reg A offerings permit companies to raise up to $75 million over a 12-month period, which is substantially higher than the Tier 1 limit of $20 million. Like Tier 1, companies must file an offering statement with the SEC and undergo a thorough SEC review. The SEC must qualify the offering before the company starts selling securities. That process and its related requirements can often take companies four to six months to complete, which may partly relate to the requirement of including audited financial statements. Companies offering under Tier 2 need to work with an auditor who is willing to consent to their audit being included in the offering and publicly filed. Unlike Tier 1, Tier 2 does typically preempt state law, although companies should work with counsel to determine any state compliance that may be required. Additionally, Tier 2 requires more rigorous ongoing reporting, including annual, semi-annual, and current event reports. These reports are designed to provide investors with more comprehensive financial and business information to keep them updated on their investment status. It is also worth noting that in a Tier 2 offering, non-accredited investors may only invest up to 10% of their annual income or net worth. Tier 1 does not include that limitation. Overall, Tier 1 and Tier 2 offer different raise amount authorizations and come with different reporting requirements. Investors must understand which tier they are investing in and what ongoing reports they should expect to receive. The chart below outlines the high-level differences between Tier 1 and Tier 2. How Reg A offerings work For a company to participate in a Reg A, it must first determine its eligibility and determine whether it will offer under Tier 1 or Tier 2. Certain eligibility requirements must be met before a company can offer securities via Reg A. For example, in a Tier 2 raise, the company must be formed and have its principal place of business in the United States or Canada. It must not be an investment company required to register under the Investment Company Act of 1940, not be a business development company, and not be disqualified under “bad actor rules” as outlined by the SEC. After determining eligibility, the company will prepare the required financial statements, draft an offering circular, and file the offering circular and all required documents with the SEC. The main document the company drafts is a Form 1-A, which includes the offering circular and exhibits. The offering circular outlines the details of the offering, the business, required disclosures, and any necessary financials. The two main authorizations the company needs to receive before selling securities to the public are “qualification” by the SEC and receiving a no objection letter from the Financial Industry Regulatory Authority (“FINRA”). Once the offering is qualified by the SEC and a no objection letter is received from FINRA, the company can start to sell securities and individuals can start investing via the company’s offering page. To ensure regulatory compliance, the Reg A investment process must be facilitated by a broker-dealer that assists the company in offering the securities. Benefits of Reg A offerings for investors There are multiple benefits for investors who participate in a company’s Reg A offering. First, investors have the opportunity to invest in typically early-stage companies with significant growth potential and financially back companies they support and want to see grow. Over the life of the investment, investors will likely receive insider updates on the company, particularly if the Reg A is offered through Tier 2. Second, Reg A offerings may be a way for investors to diversify their investment portfolio beyond traditional investments like public stocks and bonds. Finally, if the company reaches a successful exit or IPO, investors may see their investment grow in value.  Drawbacks of Reg A offerings for investors Like any investment, there is no guarantee of returns for investors choosing to invest in a Reg A offering. Many early-stage companies opt to use Reg A to fundraise, and that investment may be more risky than an investment in a larger, more established company. Compared to a traditional public company investment, Reg A requires fewer disclosures to investors, particularly if the company offers under Tier 1. This means that investors may receive less information about the company throughout the life of their investment. Some companies, however, provide regular updates to investors including investor calls, webinars, and conferences. Additionally, investors should always refer to the offering circular drafted by the company to do their own up-front research about the company. Lastly, shares purchased in Reg A offerings may not be liquid, meaning that investors may need to wait for a company to exit or IPO for them to be able to sell their stake.  How to invest in a Reg A offering Before investing, it is important to consult with a financial advisor or investment professional who can provide personalized advice based on your financial goals and risk tolerance. Once you decide to move forward, you follow these general steps to invest in a Reg A offering:  The future of Reg A investments With the evolution of technology and securities regulation, it is becoming more efficient for individuals to participate in the investment market. As investor interest in private offerings and alternative investments continues to grow, Reg A offerings will likely gain popularity. Reg A serves as a lighter form of a traditional IPO, providing both companies and investors with flexibility and a new range of investment possibilities. Reg A offerings can be an exciting way for individuals to participate in private companies on the ground floor and potentially benefit from their growth. Like any investment, investors should conduct research, consult with financial advisors, and understand the risks before investing to ensure alignment with financial goals and risk tolerance. Invest in Pacaso’s Reg A offering Looking to diversify your portfolio and participate in a Reg A offering? Pacaso is giving investors the chance to get in on the ground floor as we expand. As a pioneer and leader of the co-ownership category in real estate, Pacaso has a successful track record backed by venture capital support and proven leaders, including former executives at Zillow, dotloop and Hotwire. With nearly $100 million in adjusted gross profit in just four years, Pacaso is tapping into a growing market and is poised to enter the next stage of growth. Learn more about the

Over the last 10 years, the investing world has seen many firsts, including several new types of opportunities for investors. One developing opportunity is equity crowdfunding, which offers the chance for everyday investors to own a piece of, and participate in the growth of, private companies.  Until the mid 2010s, it was quite difficult for most people to access these types of opportunities. That changed with the 2012, Jumpstart Our Business Startups Act, known as the JOBS Act, which paved the way for investors to access private company investments. At that point, companies could start to leverage the JOBS Act and its innovative and community-building crowdfunding model to raise rounds of capital.  This introduction to equity crowdfunding is most helpful for investors starting to explore the space and the opportunities it holds.  How equity crowdfunding works At a high level, companies can use certain crowdfunding regulations (like Regulation CF), adopted by the Securities and Exchange Commission (SEC), to offer shares to everyday investors. Companies using crowdfunding must work within the SEC’s guidelines, and comply with federal regulations. Unlike traditional investments offered by brokerage accounts (think Charles Schawb, Merrill Lynch, or Fidelity), equity crowdfunding opportunities often live on crowdfunding platforms or on the private company website directly. These platforms and self-hosted fundraises provide simple, accessible investment processes just like your typical brokerage.  There are numerous equity crowdfunding platforms and some (like Crowdfunding appeals to companies because they can raise money from a broad range of people and continue to build their community. As an investor, you can diversify your portfolio and invest in private companies that may see great returns in the long run. Substack, for example, recently ran a These investors were new and existing community members, and now they all can share in Substack’s potential success. Opportunities and benefits of equity crowdfunding Because of its unique nature, equity crowdfunding offers a broad range of benefits to investors. It an opportunity to: Get in on the ground floor Equity crowdfunding gives investors the chance to invest in companies early, sometimes even before traditional venture capital or private investment. If the company is successful, investors could see very high returns. For example, the company Soliton raised $11 million of common stock in an equity round in 2019. They raised that $11 million at an $86 million valuation, and were acquired by Diversify Crowdfunding opportunities allow investors to broaden their investment portfolio, and diversify their investments. As an everyday investor, you are no longer limited to trading only traditional stocks and bonds. With just a small amount of capital, you can diversify your portfolio and invest in private companies through crowdfunding. Support companies you love Crowdfunding is a way for individuals to support businesses they love. For example, The Oakland Ballers, the new Oakland baseball team, recently launched Enjoy perks Investors may receive perks for investing in a crowdfunding round. For example, you may get early access to product releases, opportunities to meet key executives, company swag, and invitations to VIP events. Companies can benefit from investor feedback on their products or services, knowing that you have an incentive to provide an honest review to help the company grow in the long run.  What are the risks of crowdfunding investing? While there are many possible benefits of equity crowdfunding, there are some risks for investors:  Lack of liquidity One major risk of investing in a private company through crowdfunding is the possible lack of liquidity. This means that you may not be able to sell your shares until the company reaches an exit or Initial Public Offering (IPO). Your money may be tied up in the company for an unknown period of time, so you should only invest if you are comfortable with that possibility.  For example, Uber completed its Series A round in 2011, but did not go public until 2019. Although it did not raise via crowdfunding, this example shows that even very successful companies may have lengthy time horizons for investors to see a return on their investment. Some companies may provide liquidity opportunities before an exit or IPO, but that is not guaranteed. It is important to check each specific investment opportunity to see if it provides liquidity.  Startup risk Startups tend to be risky. With the potential for high reward also comes great risks. In an often-cited statistic, about 90% of startup companies fail. Research from Cost to the company From a company perspective, there is an added cost of compliance for the initial raise as well as ongoing obligations. These costs are not nearly as high as for a traditional IPO, but they may be more expensive than seeking a private raise led mainly by one or two institutional investors. This added cost can have a negative financial impact on the company if the raise does not earn them as much capital as they anticipated. When researching potential investments, you may see references to a “minimum raise amount,” which helps the company ensure it raises enough to cover all of its costs with a large amount designated for company growth once the raise is complete. Additionally, in some crowdfunding offerings, companies are responsible for keeping investors informed of their investment status on an ongoing basis. This is an extra cost for companies, but does provide good insight for investors.  How to get started? If all of this detail about equity crowdfunding excites you, your next step is to search online for equity crowdfunding opportunities just like you might research traditional stocks. There are many equity crowdfunding platforms — StartEngine, Wefunder, DealMaker, and Republic among them — that host numerous opportunities.  Other platforms, such as DealMaker, help companies host the raise on their own websites. You will want to do some research to confirm you are comfortable investing on any of the sites. One key feature of these crowdfunding platforms is that businesses usually need to pitch the platforms themselves in order to partner with the platform. The platforms are incentivized to host successful raises because the platforms take a cut of the raise, so the platforms does its own background research and vets companies before launching a raise. You will find many different investment opportunities on each crowdfunding platform. Typically, companies will have their own investment websites, pages explaining the investment opportunity, and update posts showing offering progress. You will find all of the company’s offering documents on the platform or site. These offering documents usually include pitch decks, marketing materials, and any regulatory filings. For example, After your research, making the actual investment is a seamless process. For example, let’s say you want to invest in Platforms like The future of the industry Online crowdfunding platforms and current regulatory frameworks make it easier and more efficient for investors to participate in equity crowdfunding. Equity crowdfunding opens a new route for companies to raise money, and the data backs up the dramatic increase over the last several years. Since 2020, companies have Invest in Pacaso’s Reg A offering Looking to diversify your portfolio and participate in a Reg A offering? Pacaso is giving investors the chance to invest in our company via Reg A. As a pioneer and leader of the co-ownership category in real estate, Pacaso has a successful track record backed by venture capital support and proven leaders, including former executives at Zillow, dotloop and Hotwire. With nearly $100 million in adjusted gross profit in just four years, Pacaso is tapping into a growing market and is poised to enter the next stage of growth. Learn more about the

Real estate crowdfunding gives individual investors direct access to participate in larger, often long-term real estate projects. These opportunities,  typically facilitated online, allow developers or property owners to connect with many investors in order to fund their real estate project, and share the returns to that same investor group over time. Unlike traditional real estate investment, which usually requires significant capital, crowdfunding enables investors to access the benefits of real estate investing with only a small amount of initial money. Even $100 will get you access to many real estate crowdfunding opportunities, providing you an entryway into the real estate investment arena.  Real estate crowdfunding How real estate crowdfunding works For real estate crowdfunding to be successful, a project developer or sponsor must raise adequate funds to finance the project. Using online real estate crowdfunding platforms, real estate developers or project managers (called “sponsors”) pitch their investments. These sponsors are typically individuals or companies that will find, organize, and manage a real estate crowdfunding investment. These investments include purchasing rental properties, developing land, or making loans to real estate-related parties. Real estate crowdfunding platforms provide the necessary infrastructure for sponsors to seek investment, while ensuring regulatory compliance. Investors can be individuals or entities. For example, some platforms are limited to accredited investors. To be an accredited investor, you must generally have an annual income of over $200,000 or a net worth of over $1 million. Other crowdfunding opportunities are open to everyday investors, with investment minimums as low as $100. There are two main types of real estate crowdfunding: equity crowdfunding and debt crowdfunding. Each type has a different risk profile and different potential investment returns. Equity crowdfunding In the real estate equity crowdfunding space, investors purchase shares of a property directly,  or they buy part of a business that will buy properties or operate a business that earns income from real estate. Like traditional real estate ownership, equity crowdfunding investors may benefit from property appreciation, rental revenue, and other streams of income produced by the property. However, just like any real estate investment, equity crowdfunding investors also assume their share of the risk if the project is unsuccessful.  Equity crowdfunding gives investors a slice of ownership, and the success of the investment is tied to the success of the property or project. With this investment strategy, there is a chance of larger returns, because the property or project may exceed expectations and produce significantly more income than anticipated. Because the investor owns equity, they get their piece of the income as it is passed on directly to investors after other expenses are paid. Overall, you can think of equity crowdfunding as owning a stake in a property or business. Debt crowdfunding Debt crowdfunding is slightly different from equity crowdfunding. In debt crowdfunding, investors usually lend money to the sponsor in exchange for a fixed return, typically in the form of an interest payment. Investors can think of debt crowdfunding as similar to a loan. For example, a sponsor may want to raise $10 million in debt in order to purchase rental properties.  In equity crowdfunding, the investor would either own shares in the sponsor, or own shares of the properties themselves. In debt crowdfunding, the sponsor simply promises to give a certain return, but investors do not own shares of the sponsor or property. For example, an investor might invest $1,000 in a debt crowdfunding project and receive a 10% return for five years. Each year, the investor will receive $100 from the sponsor. At the end of the five years, the sponsor must return the initial $1,000 to the investor. Returns for debt investments may be lower than equity investments, but debt crowdfunding is considered less risky, as investment returns tend to be more predictable. Benefits of real estate crowdfunding For individual investors who may not have the expertise or capital to fully fund a standalone real estate investment (such as buying a rental property outright), crowdfunding offers a range of benefits.  Accessibility  One of the biggest advantages of real estate crowdfunding is accessibility. Many platforms have low minimum investment requirements, leveling the playing field for investors interested in investing as little as $100. Since the crowdfunding platforms are accessible online, it is easy for investors to get started, without the need for an investment advisor, industry connections, or prior real estate investing experience.  Portfolio diversification  Only a small amount of money is typically required per investment, making it possible to diversify investments. Investors can spread their money across property types, geographic locations, and projects, reducing overall risk. For example, an investor using any one of the top real estate crowdfunding can invest in a single-family rental home in Georgia, a vacation rental in Phoenix and a real estate debt fund, all on the same platform.  Passive income opportunities Many real estate investments give investors the opportunity to earn passive income through rental earnings or interest payments. This is a key benefit to real estate crowdfunding; investors do not have to be involved in the day-to-day management of the property. For example, investors in a rental property might earn money every month as rent comes in, the expenses for the home are paid, and the profit is distributed to investors. Potential for high returns Like any investment, real estate crowdfunding does not guarantee any level of returns. However, given the reputation of real estate for strong returns over time, it can be a strong, risk-adjusted investment. That is why you will see many real estate crowdfunding projects with timelines of five years or more. Industry experts know that the greatest returns often come to those who are invested for a longer time period. Risks and challenges While there are many potential benefits to real estate crowdfunding as an investment avenue, there are some risks and challenges that all investors should be aware of.  Market risks and economic factors Macro, or large-scale, factors like economic downturns can disrupt the real estate market, which also includes real estate crowdfunding investments. When real estate values drop, investors may experience losses or diminishing returns. However, some Lack of liquidity When you invest in a real estate project, your money may be tied up for quite a while. Unlike publicly traded stock, which you can buy and sell within moments, real estate investors may not be able to easily sell shares or withdraw funds before the project is completed. For example, in a development project, investments may be used to build the project, so funds won’t be available until the project starts to receive a return on investment. This is a key reason to do your research and understand the details of your investment. Some investment opportunities include the ability to sell your investment after a certain time period, so keep an eye out for those details. Many crowdfunding platforms have sprung up over the last decade, but not all platforms are created equal. Some platforms may have different levels of vetting processes for projects, leading to different levels of risk for investors. It is important to always research the platform itself before moving forward with a project-specific investment. Also, every real estate project will have a different risk profile, so it is best to dig into the details before diving in. Regulatory and legal considerations As the real estate crowdfunding industry is relatively new, laws and regulations continue to evolve. The legality and custom of today’s practices may change with new regulations and innovations. Investors must accept potential regulatory uncertainty and the risk associated with it. Getting started with real estate crowdfunding Ready to get involved with real estate crowdfunding? Take an approach that prioritizes careful planning and informed decision-making. Here are a few steps to follow:  1. Choose the right platform Seek out an online investment platform that is reputable, well-regulated, and transparent. Be sure they outline any and all fees, and get a good understanding of what exactly you are buying (for example, equity or debt). Check that the platform has a strong track record of successful projects, and review their vetting process for projects and sponsors. If you know other people who invest in real estate crowdfunding, ask for recommendations. There are many websites that go over real estate crowdfunding opportunities in depth, such as BiggerPockets and NerdWallet. Some real estate crowdfunding platforms to consider are Arrived, Fundrise, Yieldstreet, RealtyMogul and EquityMultiple. 2. Know the investment limits The federal Securities and Exchange Commission sets “If either your annual income or your net worth is less than $124,000, then during any 12-month period, you can invest up to the greater of either $2,500 or 5% of the greater of your annual income or net worth.  If both your annual income and your net worth are equal to or more than $124,000, then during any 12-month period, you can invest up to 10% of annual income or net worth, whichever is greater, but not to exceed $124,000.” 3. Carefully evaluate each investment opportunity Do not jump in without doing your research. Take time to review the details of each project, including property type, location, expected returns, and investment timeline. You should also review the sponsor’s experience and take a deep dive into the financial details of the project. Within the context of each opportunity, be sure to evaluate market conditions and potential risks.  4. Follow the step-by-step investment process After you have decided on an investment, you will need to first create an account on your selected platform. Review and sign all necessary documents, and transfer funds. Then track your project’s progress on the platform throughout the life of your investment.  Future trends in real estate crowdfunding It is an exciting time to be a real estate crowdfunding investor, as many industry experts expect the market to First, technological advancements are widening the investor pool and making it easier for individual investors to participate. These innovations include new blockchain technologies and smart contracts, as well as improved online investment portals. All are poised to streamline transactions, boost transparency and increase investment efficiency. Second, the growing popularity of real estate crowdfunding is seen as a These reasons outline a case for the future continued growth of real estate crowdfunding, and it is definitely worth exploring as an investment strategy. Invest in Pacaso’s Reg A offering Looking to diversify your portfolio and participate in a Reg A offering? Pacaso is giving investors the chance to invest in our company via Reg A. As a pioneer and leader of the co-ownership category in real estate, Pacaso has a successful track record backed by venture capital support and proven leaders, including former executives at Zillow, dotloop and Hotwire. With nearly $100 million in adjusted gross profit in just four years, Pacaso is tapping into a growing market and is poised to enter the next stage of growth. Learn more about the

Dreaming of owning a vacation getaway but are overwhelmed by the traditional home-buying process? You're not alone. Between hefty down payments, ongoing maintenance and limited usage, the path to a vacation home can feel daunting.  In this post, we'll break down how to buy a vacation home in five simple steps. We’ll also explore key considerations to ensure your vacation property perfectly complements your lifestyle and financial goals. 1. Determine your vacation home’s use How to buy a vacation home starts with defining how you envision using your property. Will you escape for long weekends, spend summers by the shore or enjoy a cozy winter retreat? Your usage frequency will significantly impact property type, location and budget. Finally, think long-term. Will your vacation home be a family heirloom, a retirement haven or a potential 2. Create a realistic budget Before diving into property searches, establish a clear financial roadmap. Determine the maximum purchase price you can comfortably afford for your vacation home. To understand how to afford a vacation home, remember that your budget extends beyond the property price itself. Factor in closing costs, ongoing property taxes, homeowners insurance and potential As well, consider exploring financing options tailored for second homes. Vacation home loans and home equity lines of credit can make ownership more accessible. Carefully consider interest rates, 3. Secure financing for your second home Before diving into property searches, it's crucial to secure To secure the best possible loan terms when buying a vacation home, shop around and compare offers from multiple lenders. Consider factors like interest rates, closing costs and lender fees. A pre-approval letter can strengthen your offer when you find your perfect vacation home. 4. Get pre-approved A pre-approval letter is a lender's formal commitment to loan you a specific amount to buy a vacation home. This document is crucial when making an offer, demonstrating your financial readiness to serious sellers. To obtain pre-approval, gather essential financial documents, including: Shop around for lenders to compare interest rates, loan terms and fees. Remember, a strong credit score improves your chances of pre-approval and can secure a lower interest rate, ultimately saving you money on your vacation home mortgage. 5. Find a local agent to make an offer Partnering with a knowledgeable local real estate agent is essential for navigating the Leverage your agent's expertise to craft a competitive offer. They can provide insights into fair market value, suggest appropriate offer terms, and handle the paperwork and communication with the seller's agent. A strong offer and your agent's negotiation skills increase your chances of securing your vacation home. Additional vacation home considerations Owning a vacation home involves more than just finding the perfect property. Carefully consider the following factors to make an informed decision. Homeowners Association (HOA) fees Homeowners associations (HOAs) can offer amenities like pools, gyms and landscaping, but they also come with monthly fees. Carefully evaluate HOA fees to determine if the benefits align with your budget and lifestyle. Some HOAs have strict rules regarding property aesthetics and renovations, which might limit your customization options. Insurance coverage Protecting your vacation home is crucial. Standard homeowners insurance may not adequately cover vacation properties. Explore specialized policies that offer coverage for seasonal rentals, vacant homes and potential liabilities. Consider factors like location, property value and personal belongings when determining the appropriate coverage level. Tax implications Owning a vacation home can have tax implications. Consult with a tax professional to understand deductions, rental income reporting and potential capital gains taxes if you decide to sell. Be aware of property taxes, which can vary significantly between primary and secondary residences. Also, be aware of Maintenance and upkeep Unlike primary residences, vacation homes often experience periods of vacancy. This can lead to increased maintenance needs. Consider hiring a property management company to handle tasks like lawn care, cleaning and minor repairs during your absence. Factor the cost of routine maintenance and potential emergency repairs into your overall budget. Affordability While owning a vacation home can be fulfilling, assessing the long-term financial commitment is essential. When evaluating affordability, consider factors like property taxes, homeowners insurance and utilities. Create a detailed budget to ensure your vacation home fits comfortably within your financial plan. Price fluctuations The vacation home market can experience price fluctuations. While owning a vacation home can be rewarding, it's essential to be aware of potential market downturns. Research historical property values in your desired location to understand price trends and make informed decisions. Make your dream a reality with Pacaso  Learning how to buy a vacation home can be a transformative experience, offering a private retreat and a chance to create lasting memories. Carefully consider your budget, financing options, property location and the To make buying a vacation home even more feasible, consider