MPO Questions & Answers
How much does it cost?
 Typically
20-30 individual investors might own one or more units priced from
$50,000 - $150,000 per unit. This provides sufficient capital to
purchase high-quality properties in several different locations,
giving the investors a diverse portfolio of real estate while keeping
the ownership group reasonably compact.
What do investors actually get when they purchase
a unit?
A share of all of the assets (real estate and cash)
the company owns. If there are 20 units outstanding and you own
2 units, you own 10% of the company. Each unit holder receives their
share of cash distributions from rental income or property sales
and the right to vacation at the properties, typically for one week
per year at no charge, and additional week(s) at a 50% discount
from the lowest rental rates.
Can people sell their units?
With the MPO structure as long as the business
has sufficient cash reserves, the company itself will generally
purchase units from investors interested in selling at a price based
on the fair market value of the real estate. Usually, an investor
must have owned their unit for a couple of years to take advantage
of this option. Investors may also sell their units to a buyer they
obtain themselves, as long as the sale meets the terms specified
in the LLC operating agreement.
What’s the difference between MPO and a
Timeshare?
There are HUGE differences between the two! With
a timeshare, you are essentially purchasing vacation time in a hotel
room or small condominium (almost always at an inflated price compared
to the actual value of the property), with the seller/developer
reaping the profit. Frequently, a timeshare is difficult to get
rid of and sells for considerably less than you paid for it. With
MPO, you enjoy the pleasures and economic benefits of owning part
of a diverse portfolio of beautiful homes and luxury condominiums
in a variety of premier resort locations.
Is MPO a kind of Vacation Home Co-Ownership?
Fractional and/or Vacation Home Co-Ownerships usually
either involve self-managed property(s) owned by a few friends,
or a group of people brought together by a management company. In
the first case, you usually operate without a professional manager
to handle important decisions like property selection, sales, management
and rentals. In the second case, shares in the properties are generally
sold at a substantial premium compared to their actual value, with
the manager(s) building in upfront fees and property markups and
the investors are generally ‘stuck’ with the company
who formed the partnership, even if they are dissatisfied with the
manager’s performance.
MPO offers investors the property appreciation
and rental income of a true equity real estate investment, combined
with the convenience of professional management and the ability
to enjoy vacations in beautiful homes in desirable locations. The
properties are managed by skilled professionals who invest their
own money in the company and are compensated via performance based
incentives.
How can I be sure of getting the dates/property
I want for my free vacation time?
 With
multiple properties spread among a limited group of owners, there
is usually enough time available to accommodate most people’s
requests. For example, an LLC with five properties available 52
weeks a year has over 250 weeks of time to be shared between a typical
group of 20-30 owners. All properties are booked on a first-come,
first served basis, so if you have your heart set on a specific
property for a particular date, it makes sense to reserve early.
Who is this kind of investment suitable for?
It is certainly not for everyone. There are very
specific legal requirements as to who is ‘qualified’
for the company to admit as a new member (investor) that vary from
state to state. Investing in real estate can be highly profitable
but there is a considerable amount of risk involved, so you need
to have sufficient annual income and net worth to be able to lose
money without it impacting your lifestyle. If you want to decorate,
rent and manage a home according to your own particular taste, or
the idea of shared ownership with someone else calling the shots
as manager makes you uncomfortable, you need to look elsewhere.
Sounds interesting! Where can I get more information?
Kenwood Properties was the first company to utilize the MPO concept
for investing in resort properties. Kenwood’s founder, H.
Robb Levinsky (jump to "About Us" page), created MPO and
is happy to talk with people interested in learning more about it.
We have literature available with more detailed answers to the above
questions than space allows us to provide here. Feel free to Contct
Us at (732) 775-1930 today!
This website is intended
to provide some general guidelines as to how a business utilizing
the MPO concept operates. This is not an offer to invest in any
particular business or sell any security. MPO investments can only
be offered to suitable investors with the appropriate legal documents.
Every potential investor should be always review all information
with their legal and financial advisors when considering any investment.
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