Pacaso Review 2026: The 1/8 Second Home, the Markup It Never Names, the 6% Exit, and the Company Behind It
Pacaso sells one-eighth to one-half shares of furnished luxury second homes through single-asset LLCs at a price that includes a markup it never quantifies, manages the homes for a monthly fee, finances up to 70% of the share with itself as guarantor, holds sellers to a 12-month wait on homes with unsold interests, and takes 6% on resale with no resale prices published. The company behind it, Pacaso Inc., has lost $260 million since 2020, sold $72.3 million of non-voting Class D stock to about 17,500 retail investors in 2024 and 2025 while recording $27.8 million of advertising expense for that sale, and faces a co-owner lawsuit filed in April 2026 that alleges fraud. Its September 2026 semiannual report discloses a second, separate set of disputes: settlements with co-owners of one home over Pacaso's non-disclosure, at the time they bought, of a use arrangement it had granted to another owner, paid in credits against their future operating expenses and a waiver of the 6% resale fee. AltStreet read every filing since 2021 and 124 pages of the site to set the product against the record.
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What the data actually shows - TL;DR
Pacaso Inc. (Delaware, January 2020; Cincinnati and San Francisco; CEO and co-founder Austin Allison with 73.4% of the vote, Chairman and co-founder Spencer Rascoff with 18.4%) buys luxury second homes into single-asset LLCs, furnishes them, and sells one-eighth to one-half membership interests to consumers at a markup it does not quantify, then manages the homes for a fee (1,352 units under management at December 31, 2025), arranges financing of up to 70% with itself as guarantor, and runs a resale market at 6% (131 resales in 2025). The company reported revenue of $90.1 million in 2025 (down 29%), gross profit of $19.2 million, a net loss of $63.5 million after $25.5 million of advertising for its own stock sale, and a $260.3 million accumulated deficit; Deloitte's opinion is unqualified with no going-concern paragraph.
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From September 2024 to September 2025 it sold 24,958,207 non-voting Class D shares to about 17,500 retail investors for $72.3 million at $2.50 to $2.90 plus a 3.5% processing fee, behind a preferred liquidation preference of $283.8 million at the time, $290.7 million by June 30, 2026, and 21 months after Series C converted at $1.76. Its 15% two-year notes ($12.4 million outstanding) count the co-founders among the lenders; the July 2026 note form pays 10% for three years, unsecured, without a Pacaso Inc. guarantee and without a prepayment right. The legal record: a 2024 settlement with St. Helena capping it at four homes, a 2022 Sonoma ban, cease-and-desist letters from Palm Springs and Monterey County, a Newport Beach suit that vanished from the pending list, a 2-1 appellate win at Sullivan's Island, and Richter v.
Pacaso (D. Colo., April 2026), a co-owner suit alleging Colorado securities fraud. No securities regulator has acted.
The resale fee as filed and the minimum hold on any home with unsold interests. The site says 'sell at any time at a price of your choosing' with the hold in a footnote and the fee as 'a standard commission'. 131 resales in 2025; no prices published.
FY2025 net loss and net cash used in operating activities, on revenue of $90.1 million. Net losses of $36.1 million (2023) and $31.4 million (2024) preceded it. Adjusted EBITDA, the company's measure, was negative $21.3 million after adding back the offering advertising.
Richter v. Pacaso, Inc., filed April 2026 in Colorado federal court by two co-owners: state securities fraud, fraudulent inducement and concealment, civil theft, breach of contract. Municipal disputes in at least six California and South Carolina jurisdictions. No SEC, FINRA or state securities action found.
Offering advertising expense in 2024 and 2025 ($2,285,000 plus $25,480,000) against gross Regulation A proceeds of $72.3 million: offering-advertising expense equaled 38.4% of gross proceeds (AltStreet arithmetic from the filed income statements and offering results; the accounting does not trace particular investor dollars to particular expenses). DealMaker's fees were capped separately at $3,310,000.
Liquidation preference of Series A ($22,978,000), B ($97,509,000) and C ($163,281,000) preferred stock senior to the Class D common that retail investors bought. Series C converted at $1.76 per share in June 2023; Class D sold at $2.50 to $2.90 in 2024 and 2025; the master-repurchase lender received Class B stock and a warrant at $1.056 in August 2025.
AltStreet read of every EDGAR filing by Pacaso Inc. and the Pacaso Growth note issuers (2021 to April 2026), the FY2025 annual report and 2024 offering circular in full, a September 11, 2026 capture of pacaso.com, CourtListener docket search, the South Carolina Court of Appeals opinion, and a legal and customer-record scan. September 2026.
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What's Actually Happening
In plain English, here is how it works.
- 1Pacaso finds a vacation home, buys it, furnishes it and puts it in its own LLC. It then sells up to eight one-eighth pieces of that LLC to individual buyers at a price that includes Pacaso's markup, a core part of its transaction revenue. If you buy a piece, you own a piece of the LLC, and the LLC owns the house.
- 2You can pay cash or finance up to 70% through Pacaso's banking partners. The loan is made to the LLC, not to you, and Pacaso guarantees it. If a co-owner stops paying, Pacaso pays, then resells that share.
- 3You book stays in the Pacaso app: about six or seven trips a year for a one-eighth share, with an advance booking up to two years out and short-notice stays a few days ahead. You pay your share of the home's monthly costs, which include Pacaso's management fee.
- 4When you want out, you set a price and Pacaso lists the share on its site, gives you a market analysis and takes 6% when it sells. If the home still has unsold shares, you have to wait 12 months first. Pacaso says shares have resold for about 10% more on average; it publishes no data.
- 5Separately, Pacaso the company sold shares in itself to the public in 2024 and 2025 under Regulation A: about $72 million from about 17,500 people at $2.50 to $2.90 each. Those shares do not vote, do not pay dividends, cannot be traded anywhere, and rank behind $290.7 million of preferred stock held by the venture investors.
Quick Verdict
Is this platform right for you?
Pacaso is a large, unusually well-documented second-home co-ownership operator, with a six-year record, a Big Four audit and owners who mostly like the product. It is also a company that has never been profitable, that keeps the one number a buyer most needs (the markup) out of every document, that raised $72.3 million from retail investors for non-voting stock behind a preferred stack now standing at $290.7 million while recording offering-advertising expense equal to 38.4% of it, and that now faces a co-owner's lawsuit alleging securities fraud on top of a municipal record that already includes a ban, a settlement and cease-and-desist letters.
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This review is written for the buyer of a share first: what the markup, the monthly budget, the financing, the 12-month restriction, the 6% exit fee, the unpriced resale market, the manager's finances and the local ordinance mean for that purchase. The stock sale matters to that buyer as a description of the counterparty. Current co-owners, Class D shareholders and anyone comparing the model with a rental platform or a DIY LLC are the other readers.
Best for
- Buyers who will actually use a second home six or seven weeks a year, have computed the markup from the share stack, and can hold the share for years
- Current co-owners who want the parent's balance sheet, the legal docket and the resale terms set out from the filings
- Readers comparing co-ownership with a timeshare or a DIY LLC who want the structural differences stated precisely
Avoid if
- You are buying as an investment: the markup, the 6% resale fee and the monthly costs are borne before any appreciation, and no resale return data exists
- You need to exit on a schedule: unsold homes carry a 12-month hold, then a resale at another buyer's willingness to pay
- You want to own the company: Class D is non-voting, dividend-free, unlisted and behind $290.7 million of preferred
Top strengths
- Deloitte-audited annual reports plus semiannual reporting, with unit counts, segment margins, debt terms and covenant language, filed on time; a voluntary first-quarter update
- A working resale market (131 transactions in 2025) with seller-set pricing, a company guarantee on co-owner loans, and property operations earning a 64% gross margin
- A structure that a South Carolina appellate court found is ownership, not rental, and that Pacaso's own filings describe candidly, including the risk that a regulator treats home shares as securities
Key limitations
- The markup is undisclosed; site fee language ('a small fee', 'a standard commission', 'a small non-refundable contribution') never states a number
- Losses every year, a $260 million deficit, $46 million of debt including 15% notes, and a revolver draw period that lapsed in February 2026 with an extension 'being worked on'
- Retail shareholders paid $2.50 to $2.90 for non-voting stock 21 months after the Series C conversion at $1.76; offering-advertising expense equaled 38.4% of the gross proceeds
Where It Fits
Where Pacaso sits relative to the alternatives.
A share of one specific house you will use, fully managed
If you want
A luxury second home for six or seven stays a year at a fraction of the whole-home price, with someone else running it
Use
Pacaso, on the terms this review sets out: an undisclosed markup, a 12-month hold on unsold homes, a 6% resale fee, and a manager that has never turned a profit
A rental you never stay in, as an investment
If you want
Exposure to residential real estate for income and appreciation with a filed track record
Use
Arrived or Ark7 for single houses, Roots for a NAV-based REIT; none of them is a home you can use
The old way
If you want
Co-owning a vacation home with people you choose
Use
A DIY LLC with an operating agreement, which Pacaso itself sells templates for; no markup, no manager, all the friction
The company, not the house
If you want
To own stock in Pacaso Inc.
Use
The Regulation A offering closed in September 2025; the July 2025 Rule 506(c) offering sold $369,850 to four accredited investors at last report; no secondary market exists
Compare Before Deciding
How Pacaso compares
These are the venues a household weighing a one-eighth second home, or an investor drawn to a house share, would set beside Pacaso.
The investment version
Arrived
Single rental homes as Regulation A securities with filed economics and redemption windows; no personal use, no markup you cannot see.
The low end of the house share
Ark7
$20 rental interests through series LLCs with an in-house order book, an unfiled parent and going-concern paragraphs on every issuer.
The diversified alternative
Roots
A Regulation A residential REIT with a NAV series and quarterly repurchases, priced and redeemable instead of a house to visit.
Quick Answers
What most investors want to know first
The highest-signal facts first: minimums, liquidity reality, K-1 timing, and whether distributions are actually part of the experience.
Minimum
One-eighth of a home; listed one-eighth prices from $289,000 (Olympic Valley, CA) to $1,600,000 (Nantucket, MA); minimum 30% down if financed; regulation A shares had a $1,000 minimum plus the 3.5% processing fee
Liquidity
Active, unpriced. 131 resales transacted in 2025 (120 in 2024, 39 in the first quarter of 2026) against 1,352 units under management, roughly a tenth of the base a year. No filing or page reports resale prices, days on market or the share of listings that sold; the site's 'average 10% gain' is unsupported by data and the resale FAQ describes the steps taken 'if my share isn't selling', ending with 'we might recommend lowering the asking price'. Sellers on homes with unsold interests compete with the company's own inventory after their 12-month hold.
K-1 Timing
Not stated on the site or in the filings for home co-owners; the company refers owners to their own advisers. No K-1 for Class D shares (common stock) or the notes (1099-INT).
Distributions
Home shares produce no distributions; owners pay monthly. Class D stock pays no dividend and the company 'does not intend to declare dividends in the near future'. The 15% notes pay interest per their terms (schedule not filed).
Overview
Platform Overview
A concise read on what the platform is, how the structure works, and where the practical friction shows up for real investors.
Second-home co-ownership marketplace and manager operated by Pacaso Inc. (Delaware, incorporated January 2020; 18 E 4th Street, Cincinnati; co-founders Austin Allison, CEO, and Spencer Rascoff, Chairman; President David Kallery since September 2025; CTO Daivak Shah; CFO Alvaro Cortes; about 141 employees). Pacaso buys a home into a single-asset Delaware LLC (Holding SPE), furnishes it, and sells one-eighth to one-half membership interests to consumers at a price that includes an undisclosed markup on the property and furnishings; a Pacaso subsidiary is the LLC's non-member manager and Pacaso is its program manager for a monthly fee. Pacaso's banking partners lend up to 70% of the share price to the LLC with Pacaso as guarantor; Pacaso earns an origination fee and an interest spread.
Stays are scheduled through the SmartStay app. Owners resell through Pacaso's marketplace at a self-set price for a 6% fee, after a 12-month hold on homes with unsold interests. The parent sold Class D common stock under Regulation A Tier 2 ($72.3 million, 2024 to 2025) and sells 15% two-year notes under Regulation D through Pacaso Growth LLC vehicles. 182 homes listed across the US, Mexico and Europe in September 2026.
You pay your share of the home's monthly budget, which includes Pacaso's management fee, and Pacaso handles maintenance, staffing and the books. To leave, you list the share on Pacaso's marketplace at a price you set, subject to a 12-month hold if the home has unsold interests, and pay 6% at closing. Behind the screen, Pacaso Inc. is a venture-backed company that has raised more than $280 million of equity, lost $260 million, sold $72.3 million of non-voting stock to retail investors in 2024 and 2025, and carries $46 million of debt including 15% notes. In 2025 it transacted 231 units, managed 1,352, earned $19.2 million of gross profit and lost $63.5 million.
Operating Status
Selling and managing homes in the US, Mexico, the UK, France, Spain, Italy and Germany; 182 homes listed September 11, 2026; Regulation A offering closed September 2025; a Rule 506(c) offering of Class D shares ($369,850 sold to four investors at September 2025) and 15% notes (Pacaso Growth IV LLC) open at last filing
Minimum Purchase
One-eighth of a home; listed one-eighth prices from $289,000 (Olympic Valley, CA) to $1,600,000 (Nantucket, MA); minimum 30% down if financed; regulation A shares had a $1,000 minimum plus the 3.5% processing fee
Buyer Eligibility
Home shares: any vetted buyer who signs the owner code of conduct; US and international. Class D stock: Regulation A Tier 2 (non-accredited investors limited to 10% of income or net worth); the 2025 Rule 506(c) offering is accredited-only with a $10,000 minimum
Instrument
Home shares: membership interests in a single-asset Delaware LLC (Holding SPE) with up to eight interests, the company's determination being that they are not securities. Stock: non-voting Class D common of Pacaso Inc. Notes: unsecured notes of Pacaso Growth LLC vehicles, 15% for two years on the 2024 and 2025 raises and 10% for three years on the July 2026 form, interest quarterly, no guarantee from Pacaso Inc.
Fees as filed
Markup on property and furnishings (percentage undisclosed; waived for insiders); financing origination fee and interest spread; program and property management fees inside each LLC's budget ($8.8 million of property management revenue on 1,352 units in 2025, about $6,500 per unit per year on AltStreet arithmetic; the per-home budget is not published); 6% resale fee; 3.5% Investor Processing Fee on the Regulation A shares retained by the company
Fees as marketed
'A small fee will be assessed at closing' (financing); 'a standard commission fee is deducted' (resale); 'a small non-refundable contribution to the reserve account' (resale buyers); 1% BitPay pass-through on crypto payments; agents earn 'a full 3% referral commission on the share price'
Financing
Up to 70% of the share price through Pacaso's banking partners, lent to the LLC and reassigned to the buyer; Pacaso guarantees LLC lines (fair value 'immaterial') and steps in on a co-owner default; no prepayment penalty; Pacaso holds $37.2 million of customer financing receivables funded by a $50 million revolver at 10% to 16%
Leverage (company)
Total GAAP debt $41.9 million at June 30, 2026 (from $46.1 million at December 31, 2025), with asset-level debt at 71% of real estate assets from 65%: Holding SPE lines and revolver debt secured by real estate $52.1 million against $73.4 million of real estate assets, other Holding SPE lines $6.7 million, revolver secured by financing arrangements $22.1 million, Regulation D notes $10.1 million. The revolver was amended in June 2026: maximum cut from $50.0 million to $40.0 million, draw period to June 2027, maturity June 2030, all covenants complied with. Of $11.1 million of Regulation D notes maturing in 2026 through August 31, $2.8 million was repaid in cash and $8.3 million extended 12 months at 15%
Scheduling
SmartStay app: advance stays booked 8 days to 24 months ahead, one special-date stay per owner, short-notice stays 2 to 30 days ahead (2 to 7 on homes with unsold shares, up to 60 in Europe); 'an average of 6-7 times during the year'; swaps across the network
Liquidity
Resale on Pacaso's marketplace at a seller-set price with a Pacaso market analysis, 6% fee, 12-month hold on homes with unsold interests; 131 resales in 2025, 39 in Q1 2026, 70 in the first half of 2026 against 64 new units sold; the 6% fee was waived on one interest per owner in the 2026 owner settlements; no market for Class D stock
Audit and Reporting
Form 1-K (annual, audited by Deloitte & Touche, Seattle; unqualified, no going-concern paragraph) and Form 1-SA (semiannual, unaudited and expressly not reviewed by the auditor); Form 1-U with Q1 2026 metrics; Regulation A Tier 2. The September 2026 1-SA also notes no 401(k) matching or profit-sharing contributions declared in either half-year, $543,000 of restructuring severance in the 2026 half, and a lease portfolio consisting of a single aircraft lease
Operator
Pacaso Inc., Delaware, January 2020; Cincinnati; co-founders Austin Allison (CEO, 73.4% of votes) and Spencer Rascoff (Chairman, 18.4%; CEO of Match Group since February 2025); investors Maveron, GFC/Rocket, SoftBank Vision Fund II, Fifth Wall, Greycroft, 75 & Sunny; about 141 employees at March 31, 2026
Visual Summary
Pacaso vs. the Other Ways to Hold a Piece of a House
How Pacaso's co-ownership share compares with the fractional-rental platforms AltStreet has reviewed and with the structures its marketing compares itself to.
What you buy
Pacaso
1/8 to 1/2 of an LLC that owns one furnished home you use
Arrived / Ark7
$100 or $20 interests in a rental you never use
Timeshare
a right to use, not title
DIY LLC
whatever the agreement says
Price basis
Pacaso
purchase price plus furnishing plus an undisclosed markup
Arrived / Ark7
offering price per interest, filed
Timeshare
developer price, resale often near zero
DIY LLC
cost
Ongoing
Pacaso
monthly budget incl. management fee
Arrived / Ark7
asset management fee from rent
Timeshare
maintenance fees
DIY LLC
shared costs
Exit
Pacaso
resale at your price, 6% fee, 12-month hold if unsold shares remain
Arrived / Ark7
redemption windows; Ark7: order book
Timeshare
thin resale
DIY LLC
buy-sell clause
Filings
Pacaso
1-K, 1-SA, 1-U (Deloitte); home LLCs file nothing
Arrived / Ark7
1-K per issuer
Timeshare
developer's 10-K if public
DIY LLC
none
Legal status
Pacaso
ownership per SC Court of Appeals (2026); timeshare per several California ordinances
Arrived / Ark7
Reg A securities
Timeshare
state timeshare acts
DIY LLC
private contract
ASEconomic Positioning
- Pacaso's gross profit comes from three places the filings size: the sale of interests and the markup inside them ($14.5 million of segment gross profit in 2025, down from $19.6 million), property management ($5.9 million, up from $4.1 million) and financing, resale and other fees ($4.7 million). The first is cyclical and fell with unit sales; the second and third are recurring and now exceed half of gross profit. The company is trying to become a manager with a marketplace attached rather than a home flipper, and the 2025 numbers show it partly succeeding while still losing $21 million on an adjusted basis.
- The buyer's economics are the mirror image. The markup is paid once, up front, and is recovered only if the share resells above it; the management fee is paid every month; the 6% resale fee is paid on exit. A one-eighth buyer who uses the home six or seven weeks a year is buying a service; a buyer expecting appreciation is buying that service plus a real estate position whose entry price includes a fee they cannot see.
- The Class D shareholder's economics depend on an exit the company has not announced. With no dividend intended, no market, and $290.7 million of preferred ahead at June 30, 2026, the stock pays only in a sale or listing at a value above the preference stack. The investor site's 'Nasdaq' imagery is a display, not a filing; no registration statement exists.
Key Gaps & Non-Disclosures
- No markup percentage, no per-home budgets, no resale price data.
- No investor count for the Regulation A offering in any filing.
- No explanation of the Newport Beach case's departure from the pending list.
- No filing for the Pacaso Explorer Fund, LP named in the 1-K.
Platform Intelligence
Pacaso Milestones (AltStreet filing-tracked)
Key platform events, regulatory turns, liquidity stress points, and product launches that shape how the review should be read.
Pacaso Inc. incorporated in Delaware
Founded by Austin Allison (dotloop) and Spencer Rascoff (Zillow) to sell managed one-eighth interests in second homes through single-asset LLCs. First homes in Napa and Lake Tahoe.
St. Helena suit and the venture rounds
Pacaso sues St. Helena in April 2021 over enforcement of its timeshare ordinance. Form Ds of May 2021 ($74.4 million) and September 2021 ($125.8 million, 19 investors) record the venture rounds; the airplane lease with a CEO-controlled entity begins April 1, 2021.
SAFEs and the first ban
$15.4 million of SAFEs (Form D April 2022) and a further $3.6 million (October 2022). Sonoma becomes the first city to ban timeshares and fractional ownership. A Pacaso acquisition line of credit is opened in February 2022.
Series C at $1.76; 15% notes; Newport Beach sued
SAFEs convert into 7,216,848 Series C preferred shares at $1.76 in June 2023 (Form D July 2023, $13.4 million, 96 investors). Pacaso Growth LLC sells $6.63 million of 15% two-year notes to 41 investors, the co-founders among them. Pacaso sues Newport Beach on September 20, 2023 over its amended timeshare ordinance. FY2023: revenue $90.1 million, net loss $36.1 million.
St. Helena settles; Regulation A qualified
The St. Helena case terminates February 14, 2024 on a settlement leaving four homes as legal nonconforming uses with no expansion. Palm Springs adopts a co-owned managed housing ordinance in July. The Form 1-A is qualified September 30, 2024: up to 28,957,528 Class D shares at $2.50 plus 3.5%, DealMaker as broker. FY2024: revenue $126.6 million, net loss $31.4 million; the March 2024 note raise reaches $7.5 million.
Malibu fires; price rises; the raise closes at $72.3 million
Four Pacaso homes are destroyed and one damaged in the January 2025 Malibu fires; $13.0 million of insurance proceeds are received during the year. The Class D price rises to $2.80 (February 28) and $2.90 (May 30); a $50 million revolver at 10% to 16% is opened in February and a $100 million master repurchase facility in August, with Class B stock and warrants issued to the lender at $1.056. The Regulation A closes in September 2025 with 24,958,207 shares sold for about $72.3 million; the company announces more than 17,500 investors on October 2. David Kallery joins as President. Offering advertising expense for the year: $25.5 million.
Sullivan's Island won on appeal; revolver draw period lapses
On February 18, 2026 the South Carolina Court of Appeals rules 2-1 that a Pacaso-managed home is not a vacation rental (2026-UP-078); the town seeks rehearing. The revolver's 12-month draw period ends in February with an extension 'being worked on'.
FY2025 annual report and the Richter suit
Stefan and Nancy Richter sue Pacaso in Colorado federal court on April 21, 2026 alleging state securities fraud, fraudulent inducement and concealment, civil theft and breach of contract. The FY2025 1-K (April 30, Deloitte) reports revenue of $90.1 million, a net loss of $63.5 million, 231 units transacted, 1,352 under management and a $260.3 million deficit; Newport Beach is absent from its list of pending suits. The same day's 1-U reports Q1 2026 revenue of $25.7 million and a net loss of $5.2 million.
Semiannual report: owner settlements, a smaller revolver, notes rolled
1-SA filed September 28, 2026 for the six months to June 30, 2026. Net loss $12.5 million from $22.3 million, of which $9.4 million is the offering-advertising line going to zero; GAAP revenue $51.9 million including $20.5 million of zero-margin reimbursables; cash $36.6 million from $52.2 million; revolver extended to June 2027 with the maximum cut to $40 million; $8.3 million of $11.1 million of maturing 15% notes extended rather than repaid; asset-level debt 71% from 65%; $543,000 of restructuring severance; Malibu insurance $15.0 million received and $1.1 million disbursed. Note 13 discloses settlements with co-owners of one home over an undisclosed use arrangement granted to another owner, paid in operating-expense credits with the 6% resale fee waived.
AltStreet review
Site capture: 182 homes listed, '75 destinations', 'Pacaso shares historically sell for an average 10% gain', 'sell at any time at a price of your choosing' with the 12-month footnote; invest.pacaso.com closed to the public. Trustpilot 4.7 of 5 over 197 reviews; BBB A+, no complaints. No securities regulator action found.
Mental Model
How a Pacaso share works, and where the money goes.
Pacaso buys the house with its own cash and LLC lines of credit
Each home sits in a Holding SPE. Pacaso is the sole member at purchase and draws on mortgage facilities at the LLC level (interest-only, 10-year, capped at 65% of appraised value, 3.5% to 11% in 2025). At June 30, 2026 the company held $0.7 million of homes as inventory and $23.6 million as 'real estate investments', the deconsolidated homes where it still owns unsold shares, with asset-level debt at 71% of real estate assets against 65% six months earlier. Four Malibu homes burned in the January 2025 fires; of $15.0 million of insurance proceeds received by June 30, 2026, $1.1 million had been disbursed and $13.9 million was still held as restricted cash to rebuild.
Buyers pay the share price, which includes the undisclosed markup, and the LLC debt is assigned to them
Revenue is booked as the sale of interests plus 'transaction fees charged to buyers ... calculated as a percentage of the property and interior furnishing value'. When a financed buyer closes, the LLC's borrowing is reassigned to the buyer's share ($12.6 million of debt was assigned this way in 2025, $38.8 million in 2024). Only 23 of 231 units in 2025 were booked gross; the rest were sold from deconsolidated LLCs and booked as net gains, which is why revenue fell faster than gross profit.
Pacaso manages the LLC and the home for a monthly fee, and lends to owners for a spread
Property management revenue was $8.8 million in 2025 on 1,352 units under management, at a 64% gross margin. Financing, resale and other fees earned $4.7 million of gross profit. Pacaso also holds $37.2 million of customer financing receivables on its own balance sheet, funded by a revolver at 10% to 16%, and earns 'the potential to earn additional interest above the prevailing market rate'.
Owners exit by resale on Pacaso's marketplace, at their price, for a 6% fee
131 resales transacted in 2025 and 39 in the first quarter of 2026. The seller sets the price with a Pacaso market analysis; buyers can negotiate; the fee is 'a standard commission' on the site and 6% in the 1-K. On a home with unsold shares the seller must wait 12 months. No resale price or time-on-market data is filed or published.
Investor Operations
The practical questions investors actually care about: when tax documents arrive, how cash distributions work, and whether capital can be exited before the underlying asset is sold.
Tax Documents
K-1 Timing
What to expect
Not stated on the site or in the filings for home co-owners; the company refers owners to their own advisers. No K-1 for Class D shares (common stock) or the notes (1099-INT).
Confidence: Medium
Cash Flow
Distributions
Frequency
none
Timing
Home shares produce no distributions; owners pay monthly. Class D stock pays no dividend and the company 'does not intend to declare dividends in the near future'. The 15% notes pay interest per their terms (schedule not filed).
Consistency
Not applicable to the home shares or the stock. Note principal of $6.4 million matured in early 2026, of which $2.5 million was repaid in cash and $3.9 million extended for 12 months at the same terms.
Liquidity
Exit Reality
Holding period
12 months on any home with unsold interests; no stated hold once all interests are sold. Class D stock: no market, no redemption. Notes: 24-month term with no early redemption.
Exit options
- Resale of the home share on Pacaso's marketplace at a seller-set price, with a Pacaso market analysis, listing on pacaso.com and third-party sites, agent open houses, and a 6% fee at closing.
- Sale of the whole home by the LLC's owners collectively; the operating agreement's terms are not published.
- Class D stock: none. Notes: repayment at maturity or extension.
Secondary market
Active, unpriced. 131 resales transacted in 2025 (120 in 2024, 39 in the first quarter of 2026) against 1,352 units under management, roughly a tenth of the base a year. No filing or page reports resale prices, days on market or the share of listings that sold; the site's 'average 10% gain' is unsupported by data and the resale FAQ describes the steps taken 'if my share isn't selling', ending with 'we might recommend lowering the asking price'. Sellers on homes with unsold interests compete with the company's own inventory after their 12-month hold.
Confidence: Medium
Investment Structures
Home co-ownership interests (the product)
One-eighth to one-half membership interests in a single-asset LLC holding one furnished home; 182 homes listed on September 11, 2026 with one-eighth prices from $289,000 to $1.6 million and a one-quarter Hawaii listing at $1,179,000. Buyers pay cash, a credit line or up to 70% financing through Pacaso's banking partners (loan to the LLC, Pacaso as guarantor, 'a small fee' at closing, no prepayment penalty, crypto accepted via BitPay). Owners pay monthly operating expenses including Pacaso's management fee, book stays through SmartStay, may swap stays across the network, and resell through Pacaso at a self-set price for 6% after a 12-month hold on homes with unsold interests. 1,352 units under management at December 31, 2025; 92 new units and 131 resales transacted in 2025.
Pacaso Inc. Class D common stock (Regulation A, closed; Rule 506(c), open at last report)
Non-voting common stock of the parent. Regulation A Tier 2: qualified September 30, 2024; $2.50 to $2.90 per share plus a 3.5% Investor Processing Fee; $1,000 minimum; no minimum offering, no escrow; DealMaker Securities broker of record; 24,958,207 shares issued for about $72.3 million gross by September 2025; about 17,500 investors per the company. Rule 506(c) (Form D July 21, 2025, amended September 17, 2025): $25 million offered, $369,850 sold to four accredited investors, $10,000 minimum.
Rights: no vote, no dividend intended, no market ('it is unlikely that an active trading market will develop'), ranking behind $290.7 million of preferred liquidation preference at June 30, 2026. 26,615,064 Class D shares outstanding at June 30, 2026, from 25,932,981 at December 31, 2025, the increase coming from SAFE settlements rather than sales.
Pacaso Growth LLC 15% notes (Regulation D)
Two-year unsecured notes paying 15% a year with no conversion or early redemption, sold through Florida LLCs at a $25,000 minimum: Pacaso Growth LLC (March 2023; $6,630,000 to 41 investors at filing), Pacaso Growth II LLC (April 2023; $155,000 at filing), Pacaso Growth III LLC (April 2024; the 2024 raise reached about $7.5 million) and Pacaso Growth IV LLC (April 2025, Rule 506(c); about $0.9 million in 2025). Balance $12.4 million at December 31, 2025. The co-founders are lenders.
Through April 15, 2026, $6.4 million matured: $2.5 million repaid, $3.9 million extended 12 months on the same terms. The note form dated July 8, 2026 changes the terms for new money: simple interest of 10% a year on a 360-day basis, paid quarterly; maturity 36 months after funding; a $15 million program cap; no prepayment by the borrower without the consent of holders of a majority of the principal; investor transfers subject to the borrower's written consent in one section and free to any person in another; proceeds lent to the single-purpose Propco LLCs for owner financing, acquisitions and refinancing; no security and no guarantee from Pacaso Inc., which is defined in the note but is not a party to it; Florida law and a jury-trial waiver. The subscription page shows a $10,000 subscription against the $25,000 minimum on the April 2025 Form D, and the package carries accredited-investor certificates for the United States, Canada (NI 45-106) and other countries.
Risk
Risk Structure
This is where the marketplace pitch gives way to the actual operating reality: delayed exits, limited disclosure, fee drag, and path-dependent outcomes.
One Company on Every Side of the Home
Pacaso selects and buys the house, sets the share price and the markup, manages the LLC through its subsidiary, sets the budget, arranges and guarantees the financing, runs the app that allocates stays, and is the only marketplace for resale, where it competes with sellers using its own unsold inventory and takes 6%. Owners have an operating agreement and an owner code of conduct; the filings do not describe an independent manager, an owner vote to replace Pacaso, or a reserve held outside Pacaso's control.
A Loss-Making Manager and Guarantor
Pacaso Inc. lost $63.5 million in 2025, used $38.8 million of cash in operations, and ended the year with $52.2 million of unrestricted cash, $46.1 million of debt including $12.4 million of 15% notes, and a revolver whose draw period ended in February 2026. Deloitte issued an unqualified opinion with no going-concern paragraph and management projects more than 12 months of liquidity. The LLC owns the house regardless; the management contract, the guarantee, the app and the resale channel do not.
Non-Voting Retail Equity Behind a Preference Stack
Class D holders have no vote against 1.6 billion votes controlled 91.8% by the two co-founders, no dividend, no market, and $290.7 million of preferred ahead of them. Their price ($2.50 to $2.90) was set by the company in a best-efforts offering with no minimum and no independent valuation on the record; the Series C conversion price 15 to 21 months earlier was $1.76 and the August 2025 lender's price was $1.056.
Municipal Bans and a Securities-Status Risk Factor
The model has been banned by ordinance (Sonoma, 2022), capped by settlement (St. Helena, 2024, four homes), regulated by a dedicated ordinance (Palm Springs, 2024, tightened 2025), challenged by cease-and-desist letters (Palm Springs, Monterey County, as reported) and vindicated on appeal (Sullivan's Island, February 2026, 2-1, rehearing sought). The company's own risk factor states it has faced actions 'challenging or questioning our structure as prohibited timeshares, vacation rentals, or sale of securities' and that a regulator could treat home shares as securities, with 'enforcement actions, disgorgement, and civil penalties' for past sales.
Paying a Markup You Cannot See
The share price embeds a markup on the property and furnishings that the filings acknowledge and never quantify; resale competes with Pacaso's own unsold inventory and costs 6%.
Why it matters
The markup is recovered only on resale above cost. A buyer who does not compute it cannot know how much appreciation the home needs before the share is worth what was paid, and the 'average 10% gain' claim has no data behind it.
Mitigation / verification
Multiply the one-eighth price by eight, subtract the county-recorded purchase price and a furnishing allowance, and treat the remainder as the fee. Ask Pacaso for the LLC's first-year budget and the resale history for that home.
Manager Distress
Pacaso Inc. has lost money every year, burned $38.8 million of operating cash in 2025 and carries 15% notes and a 10% to 16% revolver whose draw period has lapsed.
Why it matters
The house survives a Pacaso failure; the guarantee on co-owner loans, the management contract, the scheduling app and the only resale channel may not. Landa's owners learned what a series LLC is worth without its manager.
Mitigation / verification
Read the 1-K liquidity section each April and the 1-SA each September on EDGAR (CIK 0001858206); watch the revolver extension, the note maturities and the cash line. Keep a copy of the LLC operating agreement and know how the manager can be replaced.
Ordinance Risk in the Town You Bought In
Cities have banned, capped and cease-and-desisted the model; the outcome differs by jurisdiction and can change after purchase.
Why it matters
A home declared a prohibited timeshare or vacation rental can be barred from operating as a Pacaso, which removes the use and the resale market at once. St. Helena's four homes continue as legal nonconforming uses; a future buyer of one of them inherits that status.
Mitigation / verification
Read the local timeshare and short-term rental ordinance and any pending amendment before closing; ask Pacaso in writing whether the home has been the subject of any notice, letter or determination.
The Richter Case
Two co-owners sued Pacaso in April 2026 in Colorado federal court for state securities fraud, fraudulent inducement and concealment, civil theft and breach of contract.
Why it matters
The claims go to how a share was sold, and the securities count tests the company's position that home interests are not securities. A ruling either way changes the product's legal character; a settlement changes nothing on the record. The complaint's allegations are untested.
Mitigation / verification
Read the complaint and Pacaso's answer on PACER (D. Colo. 1:26-cv-01702) and the next 1-SA's legal proceedings summary; treat allegations as allegations.
Class D Shares With No Exit
Retail shareholders hold non-voting, non-dividend, unlisted common stock behind $283.8 million of preferred in a company losing $20 million a year on an adjusted basis.
Why it matters
The position pays only if the company is sold or listed above the preference stack. Nothing in the filings commits to either, and the investor site's exchange imagery is not a filing.
Mitigation / verification
Value the position at the residual after preferences and losses; watch for a Form 1-U announcing a transaction; do not expect a buyer for the shares.
Biggest Misconceptions & What Actually Happens
- Pacaso is not a timeshare in the sense of a right-to-use contract: owners hold LLC interests and the LLC holds title, as the South Carolina Court of Appeals found in February 2026. Several California cities regulate it as one under their ordinances; both facts are true at once.
- Pacaso is not a securities issuer to its home buyers on its own determination, and no regulator has said otherwise. The Richter complaint alleges a Colorado securities violation; that is a claim, not a finding.
- Deloitte's opinions on FY2024 and FY2025 are unqualified with no going-concern language. The liquidity observations in this review are from management's own disclosures, not from the auditor.
- The 38.4% advertising figure is AltStreet arithmetic: filed offering advertising expense for 2024 and 2025 divided by the company's stated gross Regulation A proceeds. It excludes DealMaker's fees, which are capped separately.
- Prices, listing counts and site language are as captured on September 11, 2026; the 1-K figures are as of December 31, 2025 and the 1-U's as of March 31, 2026.
Regulatory & Legal Posture
Security Status
Consumer LLC Co-Ownership Interests Sold Directly (issuer's determination: not securities); Parent a Regulation A Tier 2 Reporting Issuer With Regulation D Note Vehicles; Broker of Record DealMaker Securities on the Reg A; No Adviser or Portal Registration
Pacaso Inc. qualified a Form 1-A offering statement on September 30, 2024 (file 024-12501) and is subject to Tier 2 reporting: it has filed Forms 1-K for FY2024 and FY2025 (April 30, 2025 and April 30, 2026, Deloitte & Touche), 1-SAs for the first halves of 2024 and 2025, six 253G2 supplements, and a 1-U on April 30, 2026. Its 15% notes are sold under Rule 506(b) and 506(c) through Pacaso Growth LLC, II, III and IV (Form Ds 2023 to 2025). The home interests are sold by Pacaso directly, with agent referral fees of 3%, on the company's determination that they are not securities; the 2024 circular's risk factor discloses that federal, state or foreign regulators could conclude otherwise and that the company has been subject to legal actions questioning its structure.
No SEC litigation release or administrative proceeding, FINRA action or state securities action naming Pacaso Inc., its officers or the Growth vehicles was found in AltStreet's scan as of September 11, 2026. Litigation on the record: Pacaso Inc. v. City of St. Helena (N.D.
Cal. 3:21-cv-02493, filed April 2021, terminated February 14, 2024 by settlement: four homes as legal nonconforming uses, no expansion); Pacaso Inc. et al. v. City of Newport Beach (C.D.
Cal. 8:23-cv-01762, filed September 20, 2023; ongoing per the April 2025 1-K; absent from the April 2026 1-K's list of pending suits; no termination date shown on CourtListener; outcome not established); Pacaso Inc. v. Town of Sullivan's Island (S.C.
Ct. App. 2024-000134; reversed 2-1 for Pacaso February 18, 2026, opinion 2026-UP-078; rehearing sought by the town); Best Home Buyer LLC and 3 CO Bighorn LLC v.
Kimball and Compass (Pitkin County 2023CV30142; Pacaso as plaintiff over a $695,000 forfeited deposit); Richter v. Pacaso, Inc. (D. Colo.
1:26-cv-01702, filed April 21, 2026; Colorado securities fraud, fraudulent inducement and concealment, civil theft, breach of contract; ongoing). Municipal actions as reported: Sonoma ban (2022); Palm Springs co-owned managed housing ordinance (July 2024, amended June 2025) and cease-and-desist letter; Monterey County cease-and-desist letter; Malibu, Beverly Hills and Newport Beach council or commission consideration. BBB: A+, not accredited, no complaints in three years. Trustpilot: 4.7 of 5 over 197 reviews.
Disclosure Quality
Strong at the company level, absent at the product level. The 1-Ks report units transacted, resales, gross real estate transacted, segment margins, debt terms, covenants, the revolver's lapsed draw period, related-party dealings, the fire claim and the pending suits in plain language, and Deloitte audits them. The product's economics are disclosed in words without numbers: a 'markup', a 'percentage of the property and interior furnishing value', 'a small fee', 'a standard commission'. Investor counts for the Regulation A raise are marketed, not filed. The Newport Beach case leaves the record silently, and the Explorer Fund appears in the text with no filing behind it.
Custody Model
Title in a Single-Asset LLC Managed by a Pacaso Subsidiary + Owner Cash Through Pacaso-Administered Budgets and Reserves + Loans From Third-Party Banks to the LLC With a Pacaso Guarantee + No Escrow on the Regulation A Offering
Regulatory Backing
Each home is owned by its Holding SPE, a Delaware LLC; co-owners hold membership interests and Pacaso's subsidiary is the non-member manager. Mortgage lines are made by third-party financial institutions to the LLC, secured by the home, capped at 65% of appraised value, and reassigned to financed buyers at closing; Pacaso guarantees payment to the lenders (fair value 'immaterial'). Operating budgets and reserves are administered by Pacaso as program manager; resale buyers make 'a small non-refundable contribution to the reserve account'.
Insurance proceeds on the Malibu fire homes are held by Pacaso as restricted cash. Regulation A subscriptions were held 'in a segregated Company account' with no escrow until accepted. No SIPC or FDIC protection applies to any of these positions.
Tax Treatment
Reporting
Home shares: reporting by the LLC per its operating agreement and use (no form stated on the site); Class D stock: no dividends, Form 1099-B only on a sale; 15% notes: Form 1099-INT
Pacaso's financing FAQ says to 'consult with your tax advisor on any potential tax obligations associated with second home co-ownership, regardless of payment method'. The site and filings do not state whether owners receive a Schedule K-1, whether the LLC elects partnership or disregarded treatment, or how personal-use days, mortgage interest and property tax are allocated. This review does not establish the treatment.
Income Character
Personal-Use Second Home Held Through an LLC (no income); Capital Gain or Loss on Resale of the Interest; Ordinary Interest on the Notes; Capital Gain or Loss on Class D Stock
A Pacaso home is used by its owners, not rented, so the position generates costs rather than income. Mortgage interest on the LLC loan and property taxes may or may not be deductible to the owner depending on how the LLC and the loan are structured and on the owner's use; the second-home mortgage interest limits and the state and local tax cap apply at the individual level. A resale is a capital transaction against basis that includes the markup and furnishing paid at purchase. Class D shares produce no income and a capital result only on disposition; the 15% notes are ordinary interest.
Limitation
The filings and site do not state the LLC's tax classification, the allocation method for expenses, or the treatment of the reserve contributions and financing fees. Owners in Mexico and Europe face local property and transfer taxes the site does not address. This review establishes no per-owner treatment and no state conclusions.
Special Considerations
- Keep the closing statement: the markup and furnishing embedded in the share price are part of basis on resale.
- The 12-month hold on homes with unsold interests makes a sub-one-year resale impossible on those homes; on fully sold homes a quick resale is a short-term gain or loss.
- Foreign homes (Cabo, London, Paris, Spain, Italy, Germany) involve local taxes and reporting the site does not describe.
- Class D shares cannot be sold to harvest a loss; no market exists.
- The 15% notes pay ordinary interest with no early redemption; extensions in 2026 rolled principal for another year at the same rate.
Account Suitability
Taxable
Where every Pacaso position sits. A personal-use home is not an investment asset for most tax purposes.
Roth IRA
Not offered; a personal-use residence cannot be held in an IRA.
Traditional IRA
Not offered for home shares; the Regulation A shares were sold to individuals directly and the filings do not describe IRA custody.
HSA
Not offered.
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AltStreet Data Layer
What the data actually shows
AltStreet read the FY2025 annual report, the 2024 offering circular and every Form D in full, and set the site's product claims against them. Read together, the findings describe a company that reports its own finances thoroughly and its product's price not at all, and that funded a loss-making year with a retail stock sale whose cost of capital was mostly advertising.
The markup is a core source of transaction economics, and it has no number
The 1-K describes revenue from 'the sale of interests in the Holding SPE and through transaction fees charged to buyers ... calculated as a percentage of the property and interior furnishing value', and in the related-party section refers to 'the markup charged to third-party customers for the Company's role in facilitating the structure and property acquisition', which the company waives for its own officers and directors. Co-ownership real estate sales and gains produced $14.5 million of segment gross profit in 2025 on 92 new units, about $158,000 of gross profit per unit sold (AltStreet arithmetic, before the furnishing program and design revenue). The site's fee language is 'a small fee', 'a standard commission' and 'a small non-refundable contribution'.
What this means
A buyer can compute the markup on any home from the eight share prices and the recorded purchase price. The segment gross profit per unit is a ceiling on what the markup could have contributed, not a measure of the markup itself, because the segment also carries financing, resale and design economics. Neither the site nor the filings will do the computation for the buyer.
Resales are real; resale prices are absent
131 resales transacted in 2025, 120 in 2024, 39 in the first quarter of 2026, against 1,352 units under management. The site says shares 'historically sell for an average 10% gain' and that the 'nearly 10%' resale increase is 'twice the appreciation for a traditional luxury vacation home'. No filing and no page reports a resale price, a days-on-market figure, the share of listings that sold, or the dataset behind the average. The resale FAQ's own escalation ends with 'we might recommend lowering the asking price'.
What this means
The market exists at about a tenth of the base a year, which is more liquidity than any fractional-rental platform AltStreet has reviewed, and it is unpriced in public. A 10% average gain on a share that carried an undisclosed markup and costs 6% to sell may or may not be a gain to the seller; the record does not say.
The manager burned $38.8 million of cash and its revolver's draw period has lapsed
Net cash used in operating activities was $38.8 million in 2025 and $32.7 million in 2024. Year-end cash was $52.2 million unrestricted. Debt was $46.1 million: LLC lines $6.8 million, a $50 million revolver drawn to $26.9 million at 10% to 16% whose 12-month draw period ended in February 2026 ('actively working to extend'), and $12.4 million of 15% Regulation D notes, of which $6.4 million matured by April 15, 2026 with $3.9 million rolled for a year. Management projects cash 'beyond the next 12 months'; Deloitte's opinion has no going-concern paragraph.
What this means
The co-owner's house is in the LLC, but the guarantee on co-owner loans, the management contract, the scheduling app and the only resale market are Pacaso Inc.'s. The company is not in distress on the record; it is a company whose 2025 was funded by $62.5 million of retail equity and $74 million of new borrowing, and whose 2026 depends on a revolver extension it had not obtained when it filed. Owners have a direct interest in the next 1-SA's liquidity paragraph.
The legal record is municipal and mixed, with one live lawsuit alleging fraud
Pacaso sued St. Helena in 2021 and settled in February 2024 with four homes grandfathered and no expansion; the city tightened its ordinance in 2025. Sonoma banned the model in 2022. Palm Springs passed a dedicated ordinance in July 2024 and strengthened it in June 2025; Palm Springs and Monterey County sent cease-and-desist letters.
Pacaso sued Newport Beach in September 2023; the case was 'ongoing' in the April 2025 1-K and is missing from the April 2026 list with no explanation. The South Carolina Court of Appeals ruled 2-1 for Pacaso on February 18, 2026 and the town sought rehearing. Stefan and Nancy Richter sued in Colorado federal court on April 21, 2026 alleging state securities fraud, fraudulent inducement and concealment, civil theft and breach of contract. No SEC, FINRA or state securities regulator has acted.
What this means
For a buyer, the operative law is the town's ordinance, and it can change after closing. For the company, the Richter securities count is the first test on the record of its position that a home share is not a security, a position its own risk factor flags. The Newport Beach silence is a disclosure gap in an otherwise thorough filing.
The fire claim shows the structure under stress, and the filing stops short of the owners
Four Pacaso homes were a complete loss in the January 2025 Malibu fires and one was damaged; Pacaso retained no ownership in three of the four. It received $13.0 million of insurance proceeds in 2025, spent $734,000, and holds $12.3 million as restricted cash against a $12.0 million liability, all committed to rebuilding. The 1-K does not describe the co-owners' position: whether they continue to pay LLC costs, whether their shares are suspended, or how long the rebuild takes.
What this means
The LLC and its insurance worked as designed: proceeds arrived and are ring-fenced. What a co-owner of a destroyed home owes and receives in the meantime is governed by an operating agreement the public cannot read. A prospective buyer should ask for that agreement's casualty clause.
The 2026 note terms are cheaper for Pacaso and thinner for the lender: 10% for three years, unsecured, no guarantee, no prepayment
The FY2025 1-K describes the 2024 and 2025 Regulation D raises as 15% notes with a 24-month term. The Pacaso Growth IV LLC note form dated July 8, 2026 pays simple interest of 10% a year, matures 36 months after funding, is unsecured, names Pacaso Inc. only as a defined term and not as a guarantor, bars the borrower from prepaying without a majority of noteholders, and conditions investor transfers on the borrower's consent in Section 2 while Section 12.8 allows assignment to any person. Proceeds are lent on to the single-purpose home LLCs. The program is capped at $15 million; the subscription page shows a $10,000 ticket against the $25,000 minimum on the April 2025 Form D, and the package includes Canadian and international investor certificates.
What this means
A lender to Growth IV is an unsecured creditor of a Florida LLC whose assets are loans to Pacaso's home LLCs, with no recourse to Pacaso Inc. The rate fell by a third and the term lengthened by half between the 2025 raise and the 2026 form; the 15% notes the co-founders hold were extended in 2025 on the old terms. The transfer clauses contradict each other, which matters for anyone who needs out before month 36.
Offering-advertising expense equaled 38.4% of the retail raise
The Regulation A offering produced about $72.3 million of gross proceeds between September 2024 and September 2025 (24,958,207 Class D shares at $2.50 to $2.90). The income statement line 'offering advertising' was $2,285,000 in 2024 and $25,480,000 in 2025, a total of $27,765,000; the 1-K attributes it to 'offering advertising costs related to the Regulation A offering which began in September 2024 and was completed in September 2025'. DealMaker Securities and its affiliates were entitled to up to $3,310,000 more. Net cash from Class D sales was $67.9 million over the two years.
What this means
The company's 2025 net loss doubled to $63.5 million largely because of this spending, and its adjusted EBITDA excludes it. Set against the roughly 17,500 buyers' money, the company recorded 38 cents of offering-advertising expense for each dollar of gross proceeds, and the broker's fees could add up to 4.6 cents more; the accounting establishes the ratio, not a tracing of any investor's dollars into those expenses. The offering was legal, disclosed and best-efforts; the ratio is what a retail-marketed equity raise costs when the issuer buys the audience itself.
Retail investors bought non-voting common behind a preferred stack that has grown to $290.7 million, at a higher nominal price than the other transactions in the filings
Series A, B and C preferred stock carried $283,768,000 of liquidation preference at December 31, 2025 and $290,732,000 at June 30, 2026, with their own voting rights; Class A common carries 10 votes a share and gives the CEO 73.4% and the Chairman 18.4% of all votes; Class B and D are non-voting. The Series C conversion in June 2023 was at $1.76 a share. Class D was sold at $2.50, $2.80 and $2.90 from September 2024 to September 2025.
In August 2025 the company issued 710,248 Class B shares to its master-repurchase lender at $1.056 and a warrant on 2,840,991 Class B shares at $1.056, valuing them with a $2.90 stock-price assumption. No dividend is intended, no market exists, and 'it is unlikely' one will develop.
What this means
A Class D share is a non-voting residual claim behind $290.7 million of preferences and $41.9 million of debt at June 30, 2026, on a company that lost $63.5 million in 2025 and $12.5 million in the following half, with total stockholders' equity of $60.4 million. The three prices on the record ($1.76, $1.056 and $2.90) are for different securities in different transactions and do not establish a fair value; what they establish is that the public paid a higher nominal price per share than the other transactions the filings describe, for a class with fewer rights.
The parent files well and on time, and two items on its own pages have no filing behind them
Pacaso Inc. has filed every Tier 2 report due since qualification, audited by Deloitte, with KPI tables, segment margins, covenant terms and a voluntary quarterly update. Against that, the 1-K names 'the Pacaso Explorer Fund, LP, a private investment fund offered separately' that the company sponsors for fees and carried interest, for which EDGAR shows no Form D or other filing as of September 11, 2026; and the investor site's claim of 17,500 investors appears in no filing.
What this means
Regulation A's compliance model is disclosure, and Pacaso meets it at the company level. The Explorer Fund and the investor count are the two places where the company's own words outrun its filings, and the next semiannual report has now come and gone without addressing either. The 1-SA filed September 28, 2026 does not mention the Explorer Fund and gives no Regulation A investor count. On the same date an EDGAR full-text search for 'Pacaso Explorer Fund' returned exactly one document, the FY2025 annual report that names it, and an EDGAR company search for 'pacaso' returned only Pacaso Inc. and Pacaso Growth LLC, II, III and IV. Whether the fund requires its own filing depends on facts the filings do not give, so AltStreet records only that none exists and that neither item has been addressed in two reporting cycles.
Data as of 2026-09-11 . AltStreet review evidence layer . Public-source analysis
Full datasetAltStreet Weekly
Take the three checks to any managed fractional home
The share stack against the recorded price, the parent's cash flow statement, and the resale footnote: the same filing database behind this review covers Arrived, Ark7, Roots and 100+ other platforms, where the answers can still change a decision.
So What?
What to do differently because of this.
What this means
The markup is part of the price of the product and a core source of Pacaso's transaction revenue, and neither the site nor the filings put a number on it
What to do
Compute it: eight times the one-eighth price, minus the home's public purchase price and a furnishing estimate, is the gross markup. On a $6.4 million share stack for a $5 million house, that is 28% before furnishing.
What this means
The manager's solvency is the risk you cannot see inside the LLC
What to do
Read the FY2025 1-K's liquidity section and Note 8 on EDGAR (CIK 0001858206): $52.2 million of cash, $38.8 million of operating cash burn, a revolver whose draw period lapsed in February 2026, and 15% notes maturing through 2027.
What this means
A Regulation A share of a loss-making company with a dual-class structure is a bet on a sale or a listing, and the preferred stock gets paid first
What to do
Value Class D at the residual after $290.7 million of liquidation preference, not at the $2.90 offering price, and expect no dividend and no market.
Decision Fit
Investor Fit
Who this works for, who it does not, and what level of patience and complexity tolerance the platform really demands.
Prospective Co-Owners Who Will Use the Home
The product delivers what it describes: a furnished home, a manager, a scheduling system and a financing path, at a share price a household can afford. Compute the markup from the share stack, budget the monthly cost from the LLC's numbers rather than the brochure, read the ordinance in that town, and plan on a multi-year hold with a 6% exit cost.
Buyers Treating a Share as a Real Estate Investment
The markup, the furnishing, the monthly costs and the 6% resale fee are all paid before appreciation, and no resale return data exists. Arrived, Ark7 or Roots give filed rental economics without the personal-use premium.
Current Co-Owners
Your house is in your LLC. Your manager, guarantor, app and resale channel are a company that lost $63.5 million last year with a lapsed revolver draw period and 15% notes maturing. Read the 1-K each April, keep the operating agreement, and know the replacement mechanism.
Class D Shareholders From the Regulation A Offering
Non-voting, dividend-free, unlisted common behind $283.8 million of preferred in a company that is not yet profitable. The position is a call on a sale or listing above the preference stack; hold it as that, watch the 1-Us, and do not expect a buyer.
Tradeoffs
Key Tradeoffs
The attraction of pre-IPO access is real, but every benefit comes bundled with a corresponding liquidity, transparency, or pricing cost.
Managed Convenience vs. the Markup and the 6%
Everything Pacaso does for an owner is a service a DIY LLC lacks, and it is paid for inside a share price whose markup is never broken out, in a monthly budget the site does not publish, and in a 6% fee on the way out.
One House You Use vs. an Exit Priced by Its Next Buyer
The appeal is a specific home in a specific place. Leaving it means finding a buyer for a one-eighth interest in that home on Pacaso's marketplace, after a 12-month hold if Pacaso still holds interests, at a price the market for that exact share sets.
Deloitte-Audited Parent vs. Undisclosed Product Economics
The company files more, and better, than any co-ownership operator AltStreet has read. The one number that determines what a buyer paid over cost is the one number the filings describe in words only.
A Ruling That It Is Ownership vs. Ordinances That Call It a Timeshare
South Carolina's appellate court sided with the structure; St. Helena, Sonoma and Palm Springs regulate it as a timeshare. The buyer's legal position depends on the town, and towns amend ordinances.
Avoid
Who This Is Not For
This section should be read as a filter, not an afterthought. If you need income, simplicity, or near-term access to capital, the structure is working against you.
Anyone Who Cannot Compute the Markup Before Signing
The share price includes a fee the filings acknowledge and never quantify; a buyer who cannot back it out from the share stack is paying a price they do not understand.
Buyers Who May Need to Sell Within Two Years
A 12-month hold on homes with unsold interests, a 6% fee, and a resale market with filed volume but no filed prices.
Retail Investors Looking for Pacaso Stock
The Regulation A offering closed in September 2025; the shares that exist are non-voting, unlisted and behind $283.8 million of preferred. There is no market to buy or sell them.
Editorial View
AltStreet Perspective
The compressed version of the review: what matters, what marketing tends to obscure, and how we would frame the platform for a serious allocator.
Verdict
Pacaso takes the managed-use experience associated with a timeshare and puts actual LLC ownership underneath it. The house is real, the management works, the courts have begun to agree that it is ownership, and the company reports to the SEC with a Big Four audit and on time. What the record also shows, six years in, is a business that has lost $260 million, that funded its 2025 with a retail stock sale whose advertising expense equaled 38% of the proceeds, whose retail shareholders hold non-voting common behind $283.8 million of preferred, whose product's central fee is described only as a markup, and whose first co-owner to allege fraud filed in April 2026. Owners rate the service highly and the filings describe the risks candidly. The two things a buyer must price for themselves are the fee they cannot see and the manager they are relying on.
Positioning
This review uses Pacaso to answer a question the co-ownership category raises: when the seller, manager, lender's guarantor and only resale venue are the same company, what does the buyer actually know about the price? The answer is in the share stack, the 1-K's segment table and the resale FAQ's footnote. Take the same three checks to any managed fractional-home product, where the answers can still change a decision.
The Bottom Line
A furnished, managed one-eighth second home from a Deloitte-audited company that has never been profitable, embeds a markup it never states, takes 6% on exit, sold $72 million of non-voting stock to 17,500 retail investors while recording $28 million of advertising expense for the offering, and now faces a co-owner's lawsuit alleging fraud.
Action
Next Steps
If you still want to engage after reading the review, these are the practical next moves that reduce avoidable mistakes.
If you are considering a share: multiply the one-eighth price by eight, look up the home's recorded purchase price, and treat the difference less a furnishing allowance as the fee; ask Pacaso for the LLC's first-year budget and that home's resale history in writing.
Before closing anywhere: read the town's timeshare and short-term rental ordinance and any pending amendment, and ask Pacaso whether the home has received any notice, letter or determination.
If you own a share: read the FY2025 Form 1-K on EDGAR (CIK 0001858206), especially the liquidity section and Note 8, and the 1-SA filed September 28, 2026, especially Note 13 on owner settlements. Keep your operating agreement; note how the manager can be replaced and who holds the reserve.
Before you buy into a specific home, ask in writing whether any owner of that home has been granted a use, scheduling or fee arrangement that differs from the standard terms, and ask for it in the operating agreement or a side letter. The September 2026 filing shows that question has a real answer on at least one home.
If you hold Class D stock: read the capitalization note and the ownership table, value the position at the residual after $283.8 million of preferred, and watch for a Form 1-U announcing a transaction.
If you are following the legal record: pull Richter v.
Pacaso, Inc. (D. Colo. 1:26-cv-01702) and Pacaso v. Sullivan's Island (S.C. Ct. App. 2026-UP-078), and check whether the Newport Beach docket (C.D. Cal. 8:23-cv-01762) has closed.
If you are comparing: read the Arrived and Ark7 reviews for filed single-house rental economics, and the Roots review for a NAV-based residential REIT with repurchases.
Final Answer
What this means for your decision.
Finding
You are buying a share of one house, at a price that includes a markup Pacaso does not quantify, from a company that manages, finances and resells it
Meaning
Pacaso buys the home, furnishes it, and sells LLC interests at a price that includes what the 1-K calls 'the markup charged to third-party customers for the Company's role in facilitating the structure and property acquisition'. The percentage appears nowhere. Pacaso's subsidiary then manages the LLC, its banking partners lend to the LLC with Pacaso as guarantor, and Pacaso collects 6% when you sell.
Action
Before signing, ask for the home's purchase price, furnishing cost and the LLC's first-year budget in writing, and compute the markup yourself from the eight share prices.
Finding
The company has never made money: $36.1 million, $31.4 million and $63.5 million of net losses in 2023, 2024 and 2025, and a $260 million deficit
Meaning
Revenue fell 29% in 2025 to $90.1 million and 22% in the first quarter of 2026. The 2025 loss doubled because Pacaso expensed $25.5 million advertising its own Regulation A stock sale. In the first half of 2026 the loss narrowed to $12.5 million from $22.3 million, but 96% of that improvement is the offering-advertising line going from $9.4 million to zero: adjusted EBITDA, which excludes it, improved $2.3 million. Cash fell from $52.2 million to $36.6 million in the six months, the revolver was extended to June 2027 with its maximum cut from $50 million to $40 million, and of $11.1 million of accredited notes maturing in 2026, $8.3 million was extended at 15% rather than repaid in cash.
Action
If you own a share, the LLC holds the house, not Pacaso. Read Note 8 of the 1-K for what happens to the guarantee and the management contract if the manager cannot fund itself.
Finding
The legal record is municipal, not regulatory, with one exception: a co-owner lawsuit alleging fraud, filed in April 2026
Meaning
St. Helena settled in 2024 with Pacaso capped at four homes; Sonoma banned the model in 2022; Palm Springs and Monterey County sent cease-and-desist letters; Newport Beach was sued by Pacaso in 2023 and the case is missing from the April 2026 list of pending suits without explanation; Sullivan's Island lost 2-1 on appeal in February 2026 and sought rehearing. Then Stefan and Nancy Richter sued Pacaso in Colorado federal court, alleging state securities fraud, fraudulent inducement, civil theft and breach of contract over their purchase. Separately, the September 2026 semiannual report discloses settlements with up to four co-owners of one Holding SPE over the non-disclosure of a use arrangement granted to another owner at the time they bought, for $597,000 recognized in the half. No securities regulator has acted.
Action
Check the ordinance in the town you are buying in, not the one in the brochure, and read the Richter complaint on PACER before you rely on the sales process.
Finding
About 17,500 people paid $2.50 to $2.90 a share for non-voting stock that sits behind $290.7 million of preferred stock, and offering-advertising expense equaled 38.4% of the gross proceeds
Meaning
The Regulation A offering raised $72.3 million gross from September 2024 to September 2025. Offering advertising expense over the same period was $27.8 million; the broker's fees were capped at $3.3 million. Class D shares carry no vote (the CEO holds 73.4% of votes), no dividend is intended, no market exists, and three series of preferred stock with $283.8 million of liquidation preference stand ahead of them. Series C investors converted at $1.76 in June 2023; the August 2025 lender received Class B stock and warrants at $1.056.
Action
If you hold Class D shares, your exit is a sale of the company or a listing, and your claim is last. Read the 1-K's capitalization note before valuing the position at what you paid.
If you read nothing else
Pacaso is a real business: 1,352 co-ownership units under management, 131 resales in 2025, Deloitte on the audit, a Regulation A issuer that files on time and a product whose owners rate it 4.7 of 5 on Trustpilot. It is also a business that has lost money every year, that never states the markup inside its share prices, whose offering-advertising expense of $27.8 million equaled 38.4% of a $72.3 million retail stock sale, whose retail shareholders hold non-voting common stock behind $290.7 million of preferred, and that now has both a co-owner lawsuit alleging fraud in federal court and filed settlements with the co-owners of another home over what it did not tell them at closing. The product can work; the two things to price are the markup you cannot see and the parent you are relying on.
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Deal Intelligence →Appendix
Sources, Disclosures, and Supporting Context
The lower section is structured like a report appendix: relationship context first, adjacent reading second, and evidence last.
Report Appendix
Disclosure
Relationship and compensation context
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Report Appendix
Disclosure
Relationship and compensation context
Report Appendix
Related Resources
Adjacent platform comparisons, frameworks, and category links
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Report Appendix
Related Resources
Adjacent platform comparisons, frameworks, and category links
Further Reading
Related Resources
Adjacent frameworks and reviews that help place the platform in a broader allocation or due-diligence context.
Explore Asset Class
Residential Real Estate (Luxury Second Homes, US, Mexico and Europe)Fund Landscape
Similar Platform Reviews
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Single rental homes sold as Regulation A securities with filed per-house economics and redemption windows: the investment version of a house share, with no personal use.
- Ark7
$20 rental-home interests through series LLCs with an in-house order book, a parent that files nothing and going-concern paragraphs: the low end of the fractional-house market.
- Roots
A Regulation A residential REIT with a published NAV series and quarterly repurchases: diversified and priced, with no house to visit.
Report Appendix
Related Coverage
AltStreet newsroom articles on Pacaso filings and disclosures
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Report Appendix
Related Coverage
AltStreet newsroom articles on Pacaso filings and disclosures
- Pacaso's Loss Halved, and Almost All of the Improvement Was One Advertising Line EndingSep 29, 2026
The co-ownership platform's semiannual report shows a $12.5 million loss against $22.3 million a year earlier. The line that paid to advertise its own retail stock offering went from $9.4 million to zero, which accounts for 96% of the change. A separate note discloses settlements with co-owners over terms they were not told about at closing.
Report Appendix
Evidence & Methodology
18 cited passages on file; sources, scope, and how the review was assembled
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Report Appendix
Evidence & Methodology
18 cited passages on file; sources, scope, and how the review was assembled
Evidence on file
18 supporting passages on file for Pacaso and its offerings from 2 source documents, no discrepancies flagged. Each passage records the metric it supports, the value read from the document, the page, and the verbatim text where the document has it. Terminal subscribers read the passages; open them in the terminal.
- Cited passages
- 18
- Source documents
- 2
- Analyst verified
- 0
- Discrepancies flagged
- 0
ASReview Evidence
Methodology
Five primary sources. (1) SEC EDGAR: every filing by Pacaso Inc. (CIK 0001858206) from the May 13, 2021 Form D through the April 30, 2026 Forms 1-K and 1-U, including the Form 1-A of September 9, 2024 and its September 26, 2024 amendment (read in full), the qualification of September 30, 2024, six 253G2 supplements (October 2024 to May 2025), the 1-SAs of November 21, 2024 and September 12, 2025, the FY2024 1-K (April 30, 2025) and FY2025 1-K (April 30, 2026, read in full), and the Form D of July 21, 2025 with its September 17, 2025 amendment; plus the Form Ds of Pacaso Growth LLC (March 10, 2023), Pacaso Growth II LLC (April 14, 2023), Pacaso Growth III LLC (April 2, 2024) and Pacaso Growth IV LLC (April 1, 2025), and the third-party notices of LifeLine Torch Pacaso LLC (2022) and Fifth Era Coinvestors, LLC - Pacaso (2025). (2) pacaso.com, 124 pages captured September 11, 2026 (home, how it works, FAQ hub and the resale, financing and ownership FAQs, financing, owner resources, owner experience terms, testimonials, careers, the listings index and 60 listing and destination pages) and invest.pacaso.com. (3) Legal scan: CourtListener docket search (federal cases and termination dates), the South Carolina Court of Appeals opinion 2026-UP-078, Law.com Radar (Richter), SEC litigation releases and administrative proceedings, FINRA actions; municipal actions from the Napa Valley Register, Press Democrat, NorthBay Biz, Malibu Times and San Francisco Chronicle, cited as reporting. (4) Customer record: Better Business Bureau profile (A+, not accredited, no complaints in three years) and Trustpilot (4.7 of 5, 197 reviews). (5) The Pacaso Growth IV LLC unsecured promissory note and subscription agreement, form dated July 8, 2026, obtained by AltStreet. Filed figures are in thousands of dollars as reported; site prices are as listed on the capture date; company press-release figures (17,500 investors, $280 million raised, average 10% resale gain) are labeled company-reported.
Scope
Company-level filings and the operator's own statements. The markup per home is NOT disclosed and is not estimated; the 38.4% advertising ratio is AltStreet arithmetic from filed expense lines and the company's stated gross proceeds. Resale prices, time to sale, per-home budgets and the Regulation A investor count are not filed. The Richter complaint was not read; its causes of action are as summarized in the 1-K and Law.com. The Newport Beach outcome is not established. Docket entries on CourtListener require credentials and were not read; termination dates are from the public search index.
Key Findings
- *Regulation A offering (Form 1-A/A September 26, 2024; 253G2 May 30, 2025; FY2025 1-K): 'offering up to 28,957,528 shares of our non-voting Class D common stock (the Shares) at $2.50 per Share. The Company will also charge investors a fee (Investor Processing Fee) of $0.09 per Share (approximately 3.5%)'; 'There is no minimum offering amount and no provision to escrow or return investor funds'; broker DealMaker Securities LLC, '3.5% commission', fees 'will not exceed $3,310,000'; price raised 'from $2.80 per share to $2.90 per share' on May 30, 2025; 'The offering was closed during September 2025. Under the Regulation A offering, the Company issued 24,958,207 shares of Class D Common Stock for gross proceeds of approximately $72.3 million.' Offering advertising expense: $2,285 (2024), $25,480 (2025), in thousands. Net proceeds from Class D sales: $5,334 (2024), $62,524 (2025).
- *Capital structure (FY2025 1-K balance sheet and Item 4): Series A preferred liquidation preference $22,978; Series B $97,509; Series C $163,281 (thousands). 'Each share of Class A common stock is entitled to 10 votes ... each share of Class B and Class D common stock is non-voting'. 'As of December 31, 2025, there are a total of 1,598,791,096 votes eligible to be cast'; Austin Allison 117,359,191 Class A, 73.4%; Spencer Rascoff 29,364,799 Class A plus 1,206,690 Series B-1, 18.4%. SAFE note: 'a portion of the 2022 SAFEs were converted into 7,216,848 shares of Series C preferred stock at $1.76 per share'. Financing note: '710,248 shares of Class B common stock ... at an issue price of $1.056 per share' and 'a warrant that entitles the holder to purchase up to 2,840,991 shares of Class B common stock ... at a purchase price of $1.056 per share', Black-Scholes 'Stock price $2.90, Strike price $1.06'.
- *Results (FY2025 1-K, thousands): revenue $90,057 (2024: $126,560; 2023: $90,063); cost of revenue $70,811; gross profit $19,246 (2024: $21,490); operating expenses $69,166 including offering advertising $25,480, sales and marketing $14,163, G&A $14,904, technology $7,154, operations $5,017, holding costs $2,363; loss from operations $(49,920); interest expense $(9,923); interest income $5,049; other expense $(8,594) (the lender stock and warrant); net loss $(63,479) (2024: $(31,436); 2023: $(36,142)); net loss per share $(0.36). Adjusted EBITDA $(21,340) (2024: $(20,369)). Segments: co-ownership real estate and financing revenue $42,005, gross profit $14,525; property operations revenue $9,366, gross profit $5,950; reimbursable pass-through $38,686. Units: transacted 91, resales 131, NOW 8, deferred 1, total 231 (2024: 119, 120, 14, 26, 279); 'we sold 92 units compared to 145 units in 2024'; gross real estate transacted $84,658 (2024: $123,359); units under management 1,352 (2024: 1,256). Q1 2026 (1-U): revenue $25,743, gross profit $7,645, net loss $(5,219); units 33, resales 39.
- *Balance sheet and debt (FY2025 1-K, thousands): cash $52,237; restricted cash $14,233 ('$12,276 of insurance proceeds ... as well as $1,957 of cash in an interest reserve account'); real estate inventory $1,559; real estate investments $22,806; other long-term receivables $37,247; total assets $142,064; deferred insurance proceeds liability $12,008; SAFE investments $2,668; debt $46,096 (Holding SPE lines $6,787 at 3.5% to 11.0%, 'typically capped at 65% of the appraised value', weighted 6.4%; revolving credit facility $26,949, '$50 million ... matures in February 2029 ... 12 month draw period that ends during February 2026 ... interest rate is between 10% to 16%', covenants of unencumbered cash at least the greater of $10 million and 30% of the balance and net worth of at least $45 million; Regulation D offerings $12,360); master repurchase agreement '$100 million ... August 20, 2025 ... no balance drawn'; total stockholders' equity $70,815; retained deficit $(260,260). Cash flows: operating $(38,784), investing $(25,346) (including $(27,808) to acquire customer financing receivables), financing $102,887. Liquidity: 'The Company is actively working to extend the draw period, but if unsuccessful it could impact our overall liquidity'; 'The Company believes that its operating activities and current cash will be sufficient to continue to fund its operations beyond the next 12 months.'
- *Regulation D notes (FY2024 and FY2025 1-Ks; Form Ds): 'During March 2024, the Company initiated a Regulation D offering raising debt capital. Through December 31, 2024 the Company raised approximately $7.5 million of cash, which offers participants a 15% annual yield and a 24 month term. There are no conversion or other early redemption rights'; March 2025 offering 'approximately $0.9 million'; 'During 2026 through April 15, 2026, $6.4 million of Regulation D investments matured and $2.5 million of principal was paid to investors in cash and $3.9 million extended the term for an additional 12 months at the same terms.' Pacaso Growth LLC Form D (March 10, 2023): debt, $15,000,000 offered, $6,630,000 sold, 41 investors, minimum $25,000, related persons David Willbrand, Joseph Maehler, Austin Allison. Related party: 'the Company's two co-founders, directly or indirectly, both participated in contributing funds towards the debt raised via SEC Regulation D ... During 2025, the Company's co-founders extended the term of the agreement for 12 months.'
- *Growth IV note form (July 8, 2026, obtained by AltStreet): 'PACASO GROWTH IV LLC, a Florida limited liability company ... UNSECURED PROMISSORY NOTE'; 'The Borrower has borrowed, and/or may borrow, up to a total of $15,000,000'; 'Applicable Interest Rate means a simple interest rate per annum equal to ten percent (10%)'; interest 'at the conclusion of the quarter after the quarter of investment, continuing on every Interest Payment Date thereafter' ('within 5 business days of the last date of each fiscal quarter'); 'Maturity Date means the earlier of (a) 36 months after the Closing Date of the Note, or (b) the date on which the Investor accelerates'; 'The Borrower may not prepay the Loan in whole or in part at any time ... without the written consent of the Requisite Investors'; 'This Note shall not be assigned, sold, pledged, transferred or otherwise disposed of by the Investor except with the prior written consent of the Borrower' (Section 2) against 'This Note may be assigned or transferred by the Investor to any Person' (Section 12.8); use of proceeds 'by making loans (the Propco Loans) to Propcos'; events of default include interest unpaid for thirty days and bankruptcy of the Borrower; Florida law, Florida courts, jury waiver; investor represents the funds 'are not provided by or financed through any third party'; subscription page 'Number of securities: 10000000 Promissory Note, Aggregate Subscription Price: $10000.00 USD'; Canadian NI 45-106 and Form 45-106F9 and international investor certificates included. No guarantee by Pacaso Inc. appears in the document.
- *Product terms (FY2025 1-K; site): 'Pacaso generates revenue through the sale of interests in the Holding SPE and through transaction fees charged to buyers for facilitating co-ownership transactions, as well as through interior design services and our furniture program. These fees, calculated as a percentage of the property and interior furnishing value'; 'the Company waives the markup charged to third-party customers for the Company's role in facilitating the structure and property acquisition' for employees and directors; 'Pacaso offers services to facilitate owner financing for up to approximately 70% of the share price, with an origination fee associated based on the amount financed and the potential to earn additional interest above the prevailing market rate'; 'Pacaso typically collects a 6% resale fee upon successful transactions'; 'Generally, Members may own one-eighth and up to four-eighths of an individual Holding SPE'. Site: 'The loan is between our banking partner and the LLC. Borrowers access financing directly from the LLC.'; 'The Pacaso property cannot be encumbered by any other debt outside of the financing options arranged by Pacaso on behalf of the LLC.'
- *Malibu fires (FY2025 1-K Note 2): 'During January 2025, the Company was impacted by the fires in Malibu, California and surrounding areas. In total, four homes were a complete loss, three of which the Company retained no ownership interest'; 'The insurance proceeds are specifically related to an insurance claim to rebuild four single family homes and remediate one other home in Malibu ... and cannot be used for any general corporate purposes'; 'the Company received a total of $13,011 in insurance proceeds related to the Malibu fire claims ... $734 was disbursed ... leaving $12,276 ... reflected as restricted cash'.
- *Legal proceedings (FY2024 1-K, April 29, 2025, and FY2025 1-K, April 30, 2026): 2025 list: Pacaso Inc. v. City of Newport Beach ('The litigation is ongoing', 8:23-cv-01762-JVS-ADS), Best Home Buyer LLC and 3 CO Bighorn LLC v. Kimball and Compass (2023CV30142, $695,000 deposit), Pacaso Inc. v. Town of Sullivan's Island (2024-000134). 2026 list ('a summary of all pending lawsuits in which Pacaso is a party as of April 30, 2026'): Best Home Buyer (ongoing); Sullivan's Island ('The Court of Appeal recently ruled in our favor and the Town has asked for a rehearing'); 'Stefan and Nancy Richter, owners of a Pacaso home, filed a lawsuit against Pacaso, Inc. on April 22, 2026. The lawsuit seeks damages for securities fraud under Colorado state law, fraudulent inducement and concealment, violations of the Colorado Civil Theft Statute, and breach of contract related to the Richter's purchase of an interest in a home. The litigation is ongoing ... Case No.: 1:26-VC-01702 (United States District Court, Colorado)'. Newport Beach is not listed. Risk factor (2024 circular): 'we have been subject to a number of legal actions challenging or questioning our structure as prohibited timeshares, vacation rentals, or sale of securities ... it is possible that federal, state and/or foreign regulators could consider the sale of interests in our homes as the sale of securities in the underlying Holding SPE. In such cases, we could be sanctioned for past sales'.
- *Municipal record (reported): St. Helena settlement approved by unanimous council vote ending litigation filed April 2021; 'four existing Pacaso homes will not be subject to any further action and will be considered legal nonconforming uses' and 'Pacaso cannot expand its operations in the City beyond Pacaso's existing four homes' (Napa Valley Register, Patch, January 2024); council 'amended its ban on timeshares to expressly prohibit the company's home co-ownership model' (2025). 'Sonoma was the first city to ban timeshares and fractional ownership in 2022. Officials in Palm Springs and Monterey County have sent cease-and-desist letters to Pacaso' (NorthBay Biz, May 2024). Palm Springs 'unanimously adopted amendments to strengthen the existing co-owned managed-housing ordinance, which was first enacted in July 2024' (June 2025). South Carolina Court of Appeals, February 18, 2026, 2-1: the home 'is not a commercial short-term rental'; 'SC Lighthouse's method of ownership, while uncommon in the Town, does not constitute commercial use of the property' (Post and Courier).
- *Customer record: Trustpilot 4.7 of 5, 197 reviews, 87% five-star, 5% one-star; Trustpilot notes the company 'invites their customers to review' and 'Replied to 100% of negative reviews'; a 2023 review: after a year owners 'were assessed approximately $8K due to inaccurate budgeting' and 'monthly payments increased by 65%', 'a real bait and switch' (search-indexed excerpt); a June 2026 one-star review: 'So disappointed with response and service from Pacaso.' BBB: A+, not accredited, 0 complaints closed in the last three years, business started February 11, 2020, 447 Sutter St, San Francisco.
- *Governance and related parties (FY2025 1-K Items 3 and 5): officers Allison (CEO, 40), Kallery (President, 61, ex-Inspirato), Shah (CTO, 45), Cortes (CFO, 43); directors Rascoff (Chairman, 50, 'CEO of Match Group', 3-5 hours per week), Cumberland, Clinton, Levitan (1-2 hours per week). 'On April 1, 2021, the Company entered into a lease agreement with an entity owned and controlled by the Company's co-founder and CEO for use of an airplane to be used for business travel.' 'The following officers and directors currently own, or have sold, within the last three years, one or more 1/8 shares in a Pacaso home: Dan Levitan, Austin Allison, Spencer Rascoff, Lara Cumberland, and Daivak Shah.' 2023 compensation (circular): Allison $5,928 cash; Rascoff $75,000; Willbrand, Curry, Maehler, Cortes $270,000 each plus RSUs; Cumberland $300,000; Shah $280,000. Employees: 'approximately 141 full time employees and 2 part time employees' at March 31, 2026. Explorer Fund: 'the Company sponsors and manages the Pacaso Explorer Fund, LP, a private investment fund offered separately from our Regulation A and Regulation D offerings, through which it may earn management fees and carried interest allocations'; EDGAR full-text and company search on September 11, 2026: no filing.
AltStreet Data Layer
AltStreet EDGAR read of Pacaso Inc. and four note vehicles, the 2024 circular and FY2025 annual report in full, and the site capture (2026-09-11)
AltStreet's Pacaso dataset is the complete EDGAR record of Pacaso Inc. and its four Growth note vehicles (2021 to April 2026) with the FY2024 and FY2025 annual reports and the 2025 semiannual report parsed into the platform's performance series, one deal record per securities offering program, filing-snapshot rows per Form D, and a same-day capture of the site's 182 listings. It is not a per-home ledger: the LLCs file nothing, and no resale price is on any record. No realized outcome exists for a co-owner or a Class D shareholder.
- Issuers: Pacaso Inc. (Reg A Tier 2, file 024-12501) + Pacaso Growth LLC, II, III, IV (Reg D 15% notes) · third-party SPVs LifeLine Torch Pacaso LLC and Fifth Era Coinvestors excluded
- Equity raised (Form D and 1-K): $74.4M (May 2021) · $125.8M (Sept 2021, 19 investors) · $15.4M + $3.6M SAFEs (2022) · $13.4M Series C at $1.76 (July 2023, 96 investors) · $72.3M Class D at $2.50 to $2.90 (Reg A, 2024-2025, ~17,500 investors claimed) · $0.37M Class D 506(c) (2025, 4 investors)
- Preferred liquidation preference 2025-12-31: A $22.98M · B $97.51M · C $163.28M · total $283.77M · votes 1,598,791,096 (Allison 73.4%, Rascoff 18.4%) · Class D non-voting
- Offering advertising: $2.285M (2024) + $25.48M (2025) = $27.77M = 38.4% of $72.3M gross · DealMaker cap $3.31M · net Class D cash $5.33M + $62.52M
- FY2025: revenue $90.06M (-29%) · gross profit $19.25M · net loss $63.48M · adjusted EBITDA -$21.34M · operating cash flow -$38.78M · deficit $260.26M · FY2024 net loss $31.44M · FY2023 $36.14M
- Units: transacted 91 + resales 131 + NOW 8 + deferred 1 = 231 (2025) · 279 (2024) · 313 (2023) · under management 1,352 (2025) from 1,256 · gross real estate transacted $84.66M (2025), $123.36M (2024) · Q1 2026: 33 + 39, revenue $25.74M, net loss $5.22M
- Debt 2025-12-31: $46.10M = SPE lines $6.79M (6.4% weighted) + revolver $26.95M (10-16%, draw period ended Feb 2026) + Reg D notes $12.36M (15%) · $100M repo facility undrawn · lender got 710,248 Class B shares + 2,840,991-share warrant at $1.056
- Cash 2025-12-31: $52.24M + restricted $14.23M (Malibu fire insurance $12.28M + interest reserve $1.96M) · customer financing receivables $37.25M · real estate investments $22.81M
- Product (site 2026-09-11): 182 homes · 1/8 prices $289K to $1.6M · 70% financing, LLC borrower, Pacaso guarantor · 12-month hold on homes with unsold interests · 6% resale fee (1-K) vs 'standard commission' (site) · 'average 10% gain' claim, no data
- Legal: St. Helena settled 2024-02-14 (4 homes) · Newport Beach (2023) ongoing Apr 2025, absent Apr 2026 · Sullivan's Island CoA 2-1 for Pacaso 2026-02-18, rehearing sought · Richter v. Pacaso D. Colo. filed 2026-04-21 (CO securities fraud et al.) · Sonoma ban 2022 · Palm Springs ordinance 2024/2025 · cease-and-desists Palm Springs, Monterey County (reported) · no SEC/FINRA/state securities action found
- Audit and record: Deloitte & Touche, unqualified, no going-concern (FY2024, FY2025) · BBB A+ (0 complaints) · Trustpilot 4.7/5 (197) · employees 141
Source: SEC EDGAR (CIKs 0001858206, 0001968560, 0001973615, 0002016936, 0002063508) + pacaso.com and invest.pacaso.com capture + CourtListener, S.C. Ct. App. 2026-UP-078 and local reporting + customer record, September 2026
Primary Source Pages
Comparable Platforms
- Arrived
The investment version of a house share: filed per-property economics, redemption windows, no personal use.
- Ark7
$20 rental interests through series LLCs with an in-house order book and an unfiled parent: the same single-house idea at the other end of the price range.
- Roots
A Regulation A residential REIT with a NAV series and quarterly repurchases: diversified and priced instead of a house you can visit.
FAQ
Frequently Asked Questions
High-intent search questions answered directly, without making users hunt through the full review.
What is Pacaso, and how does it work?
Pacaso is a company founded in 2020 by Austin Allison and Spencer Rascoff that buys luxury second homes into single-asset LLCs, furnishes them, and sells one-eighth to one-half membership interests in each LLC to individual buyers. Pacaso's subsidiary manages the LLC and the home for a monthly fee, its banking partners lend up to 70% of the share price to the LLC with Pacaso as guarantor, owners book stays through the SmartStay app (about six or seven a year for a one-eighth share), and owners resell through Pacaso's marketplace at a price they set, paying Pacaso 6%. At December 31, 2025 Pacaso managed 1,352 co-ownership units and had transacted 231 units in the year, 131 of them resales. It listed 182 homes on September 11, 2026 across the US, Mexico and Europe.
Is Pacaso legit, or a scam?
The record does not support calling it a scam. Pacaso Inc. is a Regulation A reporting company audited by Deloitte & Touche that files annual and semiannual reports on time, discloses its losses, debt, related-party dealings and lawsuits in plain language, and has managed co-owned homes since 2020 with a 4.7 of 5 Trustpilot score and no BBB complaints. What the record does show is a company that has never been profitable ($260 million of accumulated losses), that never states the markup embedded in its share prices, that raised $72.3 million of non-voting stock from about 17,500 retail investors while recording $27.8 million of advertising expense for the sale, that has been banned or restricted by several cities, and that was sued in April 2026 by two co-owners whose lawsuit alleges securities fraud. No securities regulator has acted.
What fees does Pacaso charge?
As filed: a markup on the property and furnishings that is a core source of Pacaso's transaction revenue and is described only as 'a percentage of the property and interior furnishing value' (waived for Pacaso's own officers and directors; never quantified); an origination fee and an interest spread on financing Pacaso arranges; program and property management fees inside each LLC's monthly budget ($8.8 million of property management revenue on 1,352 units in 2025); and a 6% resale fee. On the site: 'a small fee will be assessed at closing' for financing, 'a standard commission fee is deducted' on resale, 'a small non-refundable contribution to the reserve account' for resale buyers, and a 1% BitPay pass-through on crypto payments. Investors in the 2024 to 2025 stock offering paid a 3.5% Investor Processing Fee on top of the share price, retained by the company.
Is Pacaso a timeshare?
Not in the legal sense of a right-to-use contract: a Pacaso buyer owns a membership interest in an LLC that holds title to the home, and the South Carolina Court of Appeals ruled in February 2026, 2-1, that a Pacaso-managed home is owned rather than rented. Several California jurisdictions regulate it as a timeshare under their ordinances anyway: Sonoma banned fractional ownership in 2022, St. Helena capped Pacaso at four homes in a 2024 settlement and amended its ordinance in 2025 to name the model, and Palm Springs adopted a dedicated ordinance in 2024 and strengthened it in 2025. Whether a Pacaso is a timeshare where you are buying depends on that town's code.
Can I sell my Pacaso share? How does resale work?
Yes, through Pacaso. You set the price with a Pacaso market analysis, Pacaso markets the share to its buyer network, its own site and third-party sites, buyers can negotiate, and Pacaso deducts 6% at closing (the site calls it 'a standard commission'). If the home still has interests Pacaso has not sold, you must own for 12 months first. In 2025, 131 resales transacted and in the first quarter of 2026, 39. Pacaso says shares 'historically sell for an average 10% gain' but publishes no prices, times to sale or the data behind the average, and its resale FAQ's last step is 'we might recommend lowering the asking price'.
What happened with Pacaso's Regulation A stock offering?
Pacaso Inc. qualified an offering of non-voting Class D common stock on September 30, 2024 at $2.50 a share plus a 3.5% processing fee, raised the price to $2.80 in February 2025 and $2.90 in May 2025, and closed it in September 2025 after issuing 24,958,207 shares for about $72.3 million; the company said more than 17,500 people invested. DealMaker Securities was broker of record. The company expensed $27.8 million of advertising for the offering in 2024 and 2025, 38.4% of the gross proceeds. Class D shares do not vote (the CEO controls 73.4% of votes), pay no dividend, have no trading market, and rank behind $283.8 million of preferred stock. A further Rule 506(c) offering of Class D shares to accredited investors opened in July 2025 and had sold $369,850 to four investors by September 2025. The investor site now says the opportunity is closed to the general public.
Is Pacaso profitable? What do its financials show?
No. Audited by Deloitte, Pacaso reported revenue of $90.1 million in 2023, $126.6 million in 2024 and $90.1 million in 2025, with net losses of $36.1 million, $31.4 million and $63.5 million; the 2025 loss includes $25.5 million of advertising for its stock offering. Its own adjusted EBITDA was negative $20.4 million in 2024 and negative $21.3 million in 2025. Net cash used in operations was $38.8 million in 2025. At December 31, 2025 it held $52.2 million of cash plus $14.2 million restricted, and owed $46.1 million including $12.4 million of 15% notes and a $26.9 million revolver at 10% to 16% whose draw period ended in February 2026. The accumulated deficit is $260.3 million. In the first quarter of 2026 revenue was $25.7 million and the net loss $5.2 million. Management projects more than 12 months of liquidity.
What lawsuits is Pacaso involved in?
As of its April 30, 2026 annual report: Best Home Buyer LLC v. Kimball and Compass (Pitkin County, Colorado), in which Pacaso seeks a forfeited $695,000 deposit; Pacaso v. Town of Sullivan's Island (South Carolina), which Pacaso won 2-1 on appeal in February 2026 with the town seeking rehearing; and Richter v. Pacaso, Inc. (U.S. District Court, Colorado, filed April 2026), in which two co-owners allege securities fraud under Colorado law, fraudulent inducement and concealment, civil theft and breach of contract. Earlier: Pacaso v. City of St. Helena, settled in February 2024 with four homes grandfathered and no expansion, and Pacaso v. City of Newport Beach, filed in 2023, listed as ongoing in April 2025 and absent from the 2026 list without explanation. AltStreet found no SEC, FINRA or state securities action against Pacaso or its officers.
Who owns Pacaso, and who runs it?
Co-founder and CEO Austin Allison holds 117.4 million Class A shares carrying 10 votes each, 73.4% of all votes; co-founder and Chairman Spencer Rascoff, who has been CEO of Match Group since February 2025, holds 18.4%. Venture holders on the record include Maveron, GFC/Rocket and SoftBank's Vision Fund II, and the investor site names Fifth Wall and Greycroft; the preferred stock they hold carries $283.8 million of liquidation preference. The president since September 2025 is David Kallery, formerly president of Inspirato; the CTO is Daivak Shah and the CFO Alvaro Cortes. The company had about 141 employees at March 31, 2026. Several officers and directors own Pacaso shares themselves with the markup waived, the company leases an airplane from an entity the CEO controls, and the co-founders are lenders on the 15% notes.
Pacaso vs Arrived vs Ark7: what is the difference?
Pacaso sells a share of a house you use; Arrived and Ark7 sell shares of rental houses you never visit. A Pacaso share is a consumer purchase of an LLC interest at a price that includes an undisclosed markup, with monthly costs, a 6% resale fee and no income; Arrived and Ark7 interests are Regulation A securities with filed per-property rent and expenses, monthly or quarterly distributions, and exits through redemption windows (Arrived) or an in-house order book (Ark7). Pacaso Inc. is far larger and better audited than either parent, and far more indebted. If the goal is a place to stay, only Pacaso applies; if the goal is a return, only the other two report one.
I own a Pacaso share. What should I check?
Read the FY2025 Form 1-K on EDGAR (CIK 0001858206): the liquidity section (cash, operating cash burn, the revolver draw period, the note maturities) and Note 8 (debt and guarantees). Keep your LLC operating agreement and know how the manager can be replaced, who holds the reserve, and what the casualty clause says (four Malibu homes burned in January 2025). Check your town's timeshare and short-term rental ordinance for pending amendments. If you plan to sell, confirm whether the home has unsold interests (12-month hold), ask Pacaso for that home's resale history, and budget 6%.
Update History
What's changed in this Pacaso review
New data, new findings, corrections, and confirmations as they emerge. Most recent updates appear first.
- New finding
Note 13 Owner Settlements: agreements with certain owners of a Holding SPE resolving claims over the non-disclosure of a use arrangement granted to another owner at the time of purchase. $597,000 recognized, $200,000 on two executed agreements and $397,000 accrued on two unexecuted. Satisfied through credits against the owners' future operating expense billings, plus a waiver of the 6% resale fee on one 12.5% interest per owner, personal and extinguished on use or disposal. What the filings show
- New data
H1 2026 added to the performance history: total assets $128,913,000, total liabilities $68,561,000, equity $60,352,000, cash $36,626,000, GAAP revenue $51,861,000, operating expenses $24,165,000, net loss $12,507,000. Company-reported Adjusted EBITDA of negative $6,997,000 is recorded as evidence rather than in a GAAP column, because it adds back offering advertising, restructuring and a SAFE settlement loss. The balance sheet
- Correction
The FY2025 1-K's open revolver item is closed: the draw period was extended to June 2027 with maturity in June 2030 by a June 2026 amendment, and the maximum loan amount was cut from $50.0 million to $40.0 million. The review previously carried only the 1-K's statement that the company was 'actively working to extend'. The balance sheet
- New finding
The net loss improvement is 96% one line: Regulation A offering advertising went from $9,408,000 to zero. Separately, the filing's own reconciliation shows reimbursable sales and reimbursable cost of sales at an identical $20,495,000, so 39.5% of GAAP revenue cannot carry margin and segment revenue of $31,366,000 is the comparable figure. The income statement
- New data
Preferred liquidation preference ahead of Class D restated at $290,732,000 (June 30, 2026) from $283,768,000 (December 31, 2025), an accretion of $6,964,000 in six months against total stockholders' equity of $60,352,000. Class D outstanding 26,615,064 from 25,932,981, the increase from SAFE settlements rather than sales. Class D common stock
- Confirmed
The two items flagged as 'answerable in the next 1-SA' were not addressed. The 1-SA does not mention the Pacaso Explorer Fund and gives no Regulation A investor count. Verified on 2026-09-28 that EDGAR full-text search for 'Pacaso Explorer Fund' returns one document, the FY2025 1-K itself, and that no Pacaso-named entity besides Pacaso Inc. and Pacaso Growth LLC, II, III and IV appears in EDGAR company search. Reporting