I recently saw an add for multies in an apartment complex that said take part in fractional ownership blah and 0% financing.

What exactly do they mean fractional ownership and what are the benefits to me? They are new construction and have sold half the apartments already. They are sold as 4 plexes but each 4 plex is not connected to the other but is similiar to contruction. (housing track)

What are the pro's cons of this?

Thanks a bunch everyone.

Another name for timeshare, you only have 1 or 2 weeks a year you can use your part of the ownership and depending on where they are they can be difficult to resell down the road.

We have had them on the Outer Banks for more than 20 years. Some of them are luxury homes where you own 4 to 10 weeks per owner with the weeks on a rotating schedule. Glorified timeshares.

Really well look a this link and tell me if it sounds like a decent investment.

http://ictemplates.advancedaccess.com/eCard/Templates/599/Template.aspx?SentID=10688807

"ADV: Incredible Opportunity to Own New 4-Plexes with Great Cash Flow Potential"

You NEVER EVER buy based on POTENTIAL and a price to match.

I see this alot people selling apartment buildings trying to get a price based on the potential.A buyer buys based on what it is CURRENTLY doing.If they do not have it leased up you pay less.

They use the pro-formas instead of actual numbers all the time.If I am going to put in the work and create the value plays I want to reap the rewards in equity not give it to the seller when they have not done the work yet.

As far as whether it's a good deal or not I don't know the market rents for the area or how much saturation there is already among other local market conditions to run the numbers accurately.

I can tell you I wouldn't pay close to 500k for a quad that's for sure.Being brand new there is not much upside to it.

True I thought the same thing. It sounded sketchy lik section 8 quads or somethingi haha.

For your information, knowing the Austin market I can tell you they rent for around $900-$1000 a month.

In the RD Real Estate calculator, that equates to around -$200 - +$400 a month but thats a rough because I don't know what the prop taxes are exactly or the PM costs and insurance.

So this is a timeshare?

Thanks for the advice wise one.

They are offering attractive options to get you to buy into the deal so they can make a big profit and then they are on to the next deal.Next year after the additional costs they paid your first year kick in you will be lucky to eek out a profit or break even if problems arise.

Marginal deal-move on to the next one.

Thanks again

Fractional Ownership has been growing steadily even in this overall down market. Fractional ownership can reduce the risk of each owner. The two most important aspects of fractional ownership are worry-free ownership of a second home and sound real estate investment. Unlike most rental investment properties, a fractional ownership has a lifestyle factor. It is the worry-free luxury lifestyle that attracts most fractional owners.