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A startup is turning houses into corporations, and the neighbors are fighting back

Greg Rosalsky, NPR

On a sleepy cul-de-sac amid the bucolic vineyards and grassy hills of California’s Sonoma Valley, a $4 million house has become the epicenter of a summer-long spat between angry neighbors and a new venture capital-backed startup buying up homes around the nation. The company is called Pacaso. It says it’s the fastest company in American history to achieve the “unicorn” status of a billion-dollar valuation — but its quarrels in wine country, one of the first regions where it’s begun operations, foreshadow business troubles ahead.

Brad Day and his wife, Holly Kulak, were first introduced to Pacaso in May after a romantic sunset dinner in their yard. “And we just saw this drone, coming up and over our backyard,” Day says. “And we’re like, what is that?”

Pacaso denies directing or paying a drone operator to film the neighborhood. But its website does have drone photos of the house in question, located at 1405 Old Winery Court. It says it bought the photos after the fact.

Nonetheless, after the drone incident, Day and Kulak got suspicious about what was going on in their neighborhood. About a week later, their neighbors told them they were moving and selling their house to a limited liability corporation, or LLC. But they were super vague about it.

Day and Kulak began speaking with other residents on their cul-de-sac. One of them, Nancy Gardner, had learned from a friend in nearby Napa Valley about a new company called Pacaso that was buying houses in the area. The company was co-founded by a Napa resident, and it converts houses into LLCs. Pacaso then sells shares of these corporate houses to multiple investors. Gardner Googled Pacaso, and, sure enough, the house on their cul-de-sac was on its website. The company had named the house “Chardonnay” and was now selling investors the chance to buy a one-eighth share of it for $606,000.

Read more at https://www.npr.org/sections/money/2021/08/24/1030151330/a-unicorn-startup-is-turning-houses-into-corporations