As many have known and experienced, the idea of property sharing has been around for a while – timeshare started in the early 1960s in France and Switzerland; it came to the United States, and evolved into the fractional idea – with the Deer Valley Club in Park City, Utah in the 1980’s. From there, the model became the basis for the higher end private residence club, then the destination club, both equity, non-equity, and hybrid. But, due to many issues - some fiscal, some philosophical - some have passed into Real Estate history.
Yet one idea has maintained itself over some years, and that is the idea of fractional or co-ownership. There are a few companies that use this sharing model, and those that use this exemplar, from residences to private jets to yachts, are alive and well.
One of the newest co-ownership residence models is Kocomo, founded in Mexico City in 2021. It has already raised $56 million in financing to advance their unique co-ownership model.
Team Background
A distinctive, noticeable facet of Kocomo is the mixture of nationalities that comprise the founders and staff: Colombian, British, Mexican, American and Panamanian. Sort of a cultural United Nations at the outset, Kocomo’s mission reflects this: to make the dream of vacation home ownership an attainable reality for more people around the world.
The SherpaReport recently interviewed the CEO and one of the founders of Kocomo, Martin Schrimpff.
SherpaReport: How did your company come to be?
Martin Schrimpff: We had always been interested in shared real estate, as an extension of the sharing economy. We also sensed that the world is ready, post-Covid, for the global traveler, and also the global nomad. But we also have a passion for technology, so our offices and workers work remotely and our residences are tech-built to work as remote business areas.
Our vision is to provide a seamless experience for all travelers who want to explore new destinations as points of reference, without being able to lose tech connections to business and family as you go.
Part of our vision is also disrupting the fractional market, as we do things differently in terms of buying and selling.
SherpaReport: How so?
Martin Schrimpff: Well, unlike a few co-ownership groups Kocomo gives owners the option to rent or swap weeks. Our platform enables multiple people to own and enjoy a luxury vacation home and split all the costs amongst them without the fuss and hassle normally involved.
Also, as regards buying homes, we can offer potential co-owners the opportunity to finance up to 65% of their purchase and access Kocomo's streamlined interest-only financing. For example, with a $90,000 down payment, a potential buyer could own ⅛ of a $2M luxury vacation home.
SherpaReport: What are your other competitive differentiators?
Martin Schrimpff: It is very important to clarify that our co-owners are not tied to Kocomo. If for any reason they are not happy with Kocomo as a property manager, they can elect to remove Kocomo and fnd another manager. This is again really important to emphasize, as it’s another big differentiator to traditional fractionals, where the client is tied into the property management fees and can’t leave, apart from selling the fractional.
Also, whereas many startups coming out of stealth-mode focus on going from zero to a high number of sales quickly, our primary focus initially is to go from zero to 10 Kocomo qualified co-owners. Even though we are a B2C company, since our ticket size is upward of $200,000, our sales cycle exhibits a trajectory more akin to that of a B2B startup.
With Kocomo, all owners pay a $100 monthly fee to Kocomo, in addition to a one-time payment of 12.5% of the share’s value. Owners also split the costs of property taxes, insurance, cleaning, property management, maintenance, and repairs.
Also, Kocomo is focused more on the cross-border vacation homes which are more like a two- to three-hour flight away from where the owners are located. Near enough yet far enough away.
Finally, and arguably most importantly, we have created a strong property management component, as we are aware of how important it is to have a spotless, clean residence every time for our Kocomo clients.
SherpaReport: Please tell us about some of the homes you have in your initial offering at Kocomo, the range of pricing for the co-owner, and perhaps thus far, the most popular destinations being offered.
Martin Schrimpff: Prices go from $100,000 to $500,000 USD for a 1/8 co-ownership share.
These are the most popular destinations right how: In Punta Sayulita, forty minutes from Puerto Vallarta, is the Paraiso Private Villa (pictured above). This is being purchased by a tech group, and is in very much a jungle setting.
Also, in Tulum, is the AHA Penthouse, in the area of La Veleta. In the US, in Miami, there is first, the Luma Retreat. It is in one of the best locales in South Beach. And second, one in Fort Lauderdale, at the Ventura Waterfront Oasis. If an owner has another home in mind we have the capital to buy it and find other owners to share it.
SherpaReport: Where did you find the name Kocomo?
Martin Schrimpff: We first thought of the song by the Beach Boys:
We'll get there fast and then we'll take it slow
That's where we want to go, way down in Kokomo
but also, since we changed the spelling, we also thought the name inferred something fun, lighthearted, and joyful. All of this is what we need in life, right now and in years to come.
2023 EDITORIAL UPDATE: Kocomo has subsequently ceased selling fractional shares in its own homes.