Is your vacation home investment now a financial burden?
With short-term rental regulations tightening across South Carolina, many owners are scrambling for solutions.
This week, we welcome Doug Rich, CEO of Plum Co-ownership, to discuss an innovative answer: fractional home ownership. Learn how you can protect your investment, keep the family memories, and continue building a generational legacy, even in a changing market.
Doug Rich is the CEO of Plum Co-ownership, a pioneering company that helps vacation homeowners and investors navigate South Carolina’s evolving short-term rental landscape. With a focus on fractional ownership, Doug helps clients buy, sell, and manage vacation properties, making real estate investment more accessible and profitable.
Key Takeaways:
- 0:04 – Buyers’ perspective: Fractional ownership is not a timeshare. Buyers truly own a share of the property, which can appreciate in value over time. Fees and maintenance are fully transparent.
- 0:42 – Sellers’ perspective: Owners can access equity from their vacation home while preserving family memories. Fractional ownership allows them to keep a portion of the property.
- 4:09 – How Plum Co-ownership helps: Assists clients in buying, selling, and managing fractional properties, including LLC setup, scheduling, finances, and communications—a turnkey solution.
- 7:01 – Fractional ownership as a crowdfunding model: Multiple investors pool resources to buy higher-value properties, making premium vacation homes more accessible. Example: $3.5M Holden Beach property shared among eight owners.
- 9:03 – Navigating short-term rental regulations: Fractional ownership helps investors comply with new South Carolina short-term rental rules while still generating rental income and maintaining property use.
- 15:09 – Best markets and legacy benefits: Islands like Kiawah, Hilton Head, and Pawleys Island have favorable short-term rental markets. Co-ownership lets families enjoy vacation homes for generations without full ownership costs.
- 23:00 – Common questions answered: Buyers want assurance they truly own something; sellers want to take equity out while keeping access. Co-ownership fosters community and well-managed properties.
- 25:36 – Action takeaway: Regulations may change, but your legacy doesn’t have to. Explore creative ownership strategies to protect investments and secure generational wealth.
Connect with Doug:
- Website: https://www.plumcoownership.com/
- Email: Doug@PlumCoownership.com
- Facebook: https://www.facebook.com/PlumCoOwnership
- Instagram: https://www.instagram.com/plumcoownership/
Connect with Corwyn:
- Contact Number: 843-619-3005
- Linkedin: https://www.linkedin.com/in/cmelette/
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DOUG:
From the buyer’s perspective, they want to know that they truly are owning something. So if I’m a buyer and I’m buying a share in a group property, first question they ask is, is this a timeshare? Important to know that it is not a timeshare. You own your share of that property and it goes up in value just like any real estate. All the fees and maintenance fees and things like that are completely transparent. It’s all operated by the group. So I take people through that to help them understand that they’re not just buying a week in Jamaica and it’s immediately no value the minute I get done with it. The other side, on the seller’s side, they just want to, can I do this? Can I take equity out of my vacation property without having to give up the times and the memories that I have had here for years and years?
CORWYN:
Good morning, good morning, great morning to you guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. Guys, this is your first time listening to the show. Hey, you know what we do. You know how we say it. And y’all can say it with me. You are in for a treat. That is because our mission here is very simple. That is to empower our community through financial literacy and real estate education. Guys, we’re legacy building. That is what we do. Quick shout out to those who listen faithfully all the way from Hollywood, what you know no good, all the way out to Mark’s Corner. Y’all know my mama live out there, y’all. Gotta give a shout to Elder Evans, Pastor Evans. Gotta put that senior on that guy name. That guy will still snatch me up if I don’t do so. Love y’all to pieces. So guys, we got a nice extra special. I mean, I’m talking about right there show for you today. And I’m super excited for the conversation. So we’re going to cue this one up a little bit differently for you. First, we’re going to give it to you this way. Our conversation today is about owning your piece of the coastline. So I want you to envision that because we always about ownership. We always about buying in. We always about that mindset, that mentality of participation and not just being, we want to be calm, want to be doing something. So what if new regulations suddenly made your vacation home investment less profitable or even a financial burden? Across South Carolina, short-term rental rules are tightening, leaving many owners scrambling for answers. Hey, yeah, we got an answer for you today. But what if there was another way to protect your investment? Keep enjoying your property and still pass down wealth to the next generation. Our guest today is none other than Doug Rich. I like that last name. He rich, y’all. I love it. But Doug is a CEO of Plum Co-ownership, a company that helps vacation owners adapt to South Carolina’s ever-changing short-term rental regulations with nearly 70% of his clients now being short-term rental owners seeking alternatives. Doug is at the forefront. Yeah, the front of the line, y’all. I love that. A fraction of home ownership, an innovative model that allows investors to share costs, reduce risk while still reaping the benefits of real estate home ownership. Doug, how are you doing today? I’m doing great. Doing great. I couldn’t have said it better myself. That’s awesome. Well, thank you. But look, just so you know, I’m always available for introductions. Let me know what stage you’re going to be on and I’ll make sure that I get there and warm it up for you. How about that? That sounds great. That sounds fantastic. Now, Doug, I gave my rendition. But if you don’t mind for our listeners, give them that big picture, who you are and what it is that you do.
DOUG:
Yeah, so what Plum does mainly is we really focus on the co-ownership vacation market. Some people call it fractional vacation ownership. Not to be confused with timeshares, okay? It’s real true ownership. And what we bring to the table is we help people buy, sell, and manage their fractional properties. So we have a Plum Marketplace where we list fractional shares of property for sale, where buyers can go and almost automatically buy shares of properties. Plum Marketplace is also a place where people can list their fractions of property. So we have a lot of people you had mentioned who have an Airbnb kind of short-term rental property. And they’re either finding out that short-term rentals aren’t allowed in their town anymore or they’re being heavily reduced. And so they’re looking for other mechanisms to maintain ownership of the property without with other people. So what we do is we help them sell shares of their home in a very automated, simple way. Lastly, one of the things that we always hear is the biggest challenges to co-owning a property is how do you manage it? So we have a automated process for moving it into an LLC, being able to sell shares of that LLC. And then we handle scheduling, finances, communication are usually the top three that people look to us to help them with. And we’ll even go all the way down to managing the LLC for them if they’d like. So this way, it’s just a turnkey co-ownership arrangement.
AD:
Let’s take a short break. Do you remember your grandma’s front porch? You know, that spot where stories were told, kisses were stolen, and sweet tea was always being sipped. Now imagine giving your family a place to make those same memories, but in a brand new energy efficient and home that was built just for you. At Country Boy Homes, we help folks just like you find that forever feeling. Whether it’s your first home, your next home, or your we’re done with rent forever, like seriously home. We specialize in affordable, and durable, manufactured, and modular homes, the kind that make room for muddy boots, big dreams, and second helpings. Come see what coming home really feels like. Call 843-574-8979 today. Country Boy Homes, built to last, priced for you. So Doug, as you were talking, what I heard was you guys just, well, I won’t say you just kinda, what I heard embedded in there was a crowdfunding, if you will, but a crowd model to real estate ownership is what I heard in there. Does that sound about right? Yeah, it could, yeah.
DOUG:
If you look at the property as an investment, and then you have a group of people coming together to own that piece of property, yeah, you could see it as a crowdfunding, because they’re pooling their resources together. And oftentimes, they’re buying a more expensive property that rents better and creates a better long-term investment than if you just, so let’s say it’s a million dollar property, $100,000 each with 10 co-owners buys you a million dollar property. But if you only invested $100,000 on one property, it wouldn’t be nearly as attractive as the $1 million property, and nor have the rental history. My favorite example is we have one on Holden Beach in North Carolina. You know, it’s a $3.5 million property. By having eight owners together, it makes it affordable for these eight owners, and they get to enjoy a $3.5 million property for $325,000 a share. So, it becomes like- That don’t sound like a bad deal right there.
CORWYN:
And it’s growing crazy. So, Doug, you led into the show with, I want to get this out because it’s very important. People oftentimes, the model, before it was rained in, ran away, is what I’ll say, if that’s fair. Because people start, once somebody realized, wait a minute, this is beyond mom and pop. And what I mean by that is, once consumers realized that short-term rental of property was beyond the mom and pop and was an actual business model that worked, here came everybody. Everybody’s buying up properties in Airbnb and some people house hacking them, so to speak, and just all this other stuff, and it ran rapid. But now we’ve hit what I’ll consider a lot of stopgap measures and legislation that are designed to say, hold on, wait a minute, let’s pull these rains back. So, let’s talk about this and applying it to this model. Well, let’s talk about that. Let’s first start with the property owner and what this looks like as far as regulations and all that stuff. If you’re a property owner and considering, or maybe you are already short-term renting a property, what is it that’s going on and what is it that’s coming that could possibly impact what they’re currently doing negatively?
DOUG:
Yeah. I mean, if you’re in an area where you can currently do short-term rentals and you’re making a profit already from your short-term rental, what’s happening from a regulatory standpoint is a lot of towns and municipalities are coming out with regulations limiting the number of short-term rentals in that area. I think Charleston has a regulation. I think it’s no more than four people can be in a building or something like that. And there’s further down in South Carolina, there’s regulations in Bluffton and so on and so forth where they’re limiting how many short-term rentals are available in their towns. And this causes a lot of problem for people. Just think about it. If I just invested all my hard-earned money in a property and I wanted to use it a little and rent it out otherwise, and I just found out I can’t rent it out anymore, the model doesn’t make sense. So what we bring to the table for those property owners is a way to maintain a share of their property while selling the rest. And this way, multiple people can enjoy it and still live within the regulations of the short-term rental market.
CORWYN:
Now, you’re also seeing regulations now that you have to physically live within a certain distance of said Airbnb property. And then there’s also, I’ve recently seen, heard of prospective legislation that will require you to be on the same property. So you have to be physically there in order to sublet an Airbnb, a room or whatever portion of the property or what have you. So that’s definitely a lot to overcome. So let’s put this around on the other side, right? That’s for property owners, things they need to be aware of. But what about investors? So someone who is looking to get into space. Something you talked about, you gave the model of the property up on Holden Beach. That sounds like a win-win all the way around right there. But for investors, how is this long-term? What does this look like long-term for an investor that may decide, okay, this is something I want to participate in? What is, quote-unquote, pardon the pun, Doug, what is their exit strategy?
DOUG:
Yeah, exactly. That is perfect. So think about it. Like if, again, the whole idea is how do I invest in property and get the best value for the money I’m investing? So when you go in and if you go in with five people or four people and you invest in a property, you’re oftentimes getting a better, more rentable property than if you were to just take the same amount of money and invest in it by yourself. So really what we do is we can almost create investment groups. So one of our groups, they invested in a vacation property and they all chipped in. They wanted to use it for two weeks, but other than that, they wanted to rent it as much as possible. So they get great rental income. They all split it amongst themselves and they get to occasionally enjoy their vacation property in the mountains of North Carolina. So it’s fantastic. Like it works out for all three families, all four families, and it works out as far as an investment because that property is also increasing in value as time goes on. And if they get to the point in seven years and they decide, hey, we want to sell it, they sell it and they make the profits of their shares of that property.
CORWYN:
So I’m going to put a little bit of a spin in here. And Doug, in my mind, I think I know the answer to the question, but you’re the expert. So that’s what I’m going to ask. Are you seeing your investors or people that essentially, you know, that you syndicate, that you assemble for these types of purchases, are they all bringing in cash? Are they leveraging financing? How are you putting these instructions, these deals though? Are those working?
DOUG:
Well, we have a lot of flexibility. I would say at least 60% of the deals we put together are cash, but we do have relationships with financing partners who will loan money to the group based on their financial capabilities, as well as what kind of short-term rental income is expected from the property. If it’s a true investment property, we can get financing for it. And we do have properties where they already have a pretty good financial arrangement with a mortgage. So rather than give that up, we offer people to put a down payment and then pay, add that monthly mortgage payment into their monthly maintenance fees. So there’s lots of strategies we can do for this. It really depends on the group. But like I said, I think probably about 60% of what we do today is all cash, basically cash investments.
CORWYN:
Okay. It makes perfect sense. I mean, you’re looking at this from the bigger picture, which is there’s times when, okay, well, we got cash or whatever, but my imagination tells me, and Doug, please correct me if I’m wrong, but our imagination says there are times when you have a group that you put together, they purchase a property and the property is performing and another opportunity pops up. And sometimes maybe all the cash is already in this one. Do you have situations where your groups may re-leverage a property, pull some cash out to go make another purchase? Yeah.
DOUG:
Afterthought, like, so it’s all cash in one property, definitely we can do that. Again, it’s going to be a corporate loan and they’re going to have to all guarantee it as a group. But assuming that they do that, our partners, our financing partners will help them again, take that cash out and maybe even leverage buying another property. Sweet, sweet. Yeah. So like when I talked about the Holden Beach property, that’s a real interesting one because it was one owner and he wanted to sell shares of it so he could take equity out so he could buy another property. So we have a lot of people who maybe they have all cash in their property and they want to now take some equity out of that in a mechanism so that they can go and leverage it again and buy something else.
CORWYN:
That is neat. You actually just gave me an idea, Doug. So thank you for that. I’m going to have to stick that somewhere now so I can remember and come back to that. So Doug, let me ask you the question that probably a lot of people listening to the show today may have. And that is, this is your realm, this is your arena, quote unquote, this is your universe, this way you do what you do, this way you get down what you get down. So with that being said, what markets are you seeing in South Carolina that are right or good, great, if you will, for short-term rentals? And then in Reprosity, I’m going to ask you those areas where you’re like, eh, maybe not.
DOUG:
Yeah. And that’s a moving question too. But most of the islands like Kiowa, Hilton Head, where I am in Pawleys Island, all have very favorable relationships with short-term rental operators. They really welcome them. And really like Hilton Head, Kiowa and those, they’re really built on the short-term rental market. But in all of those islands, they have an area where it’s single family homes and it may not be allowed or it may not be common. I mentioned Bluffton, for example. And these regulations could be changing. So as an investor in a property in those areas, you should always be careful and hesitant and make sure that the regulations are going to stay the way that they are. But South Carolina is fantastic up and down the coast and it just continues to grow. And for us in the fractional home ownership or co-ownership vacation market, here in Pawleys Island, there’s hundreds of these already that have been established for years and years, all with different numbers of shares and fractions available. Kiowa, right out of the gate, you have situations where the builder builds the property and sells shares of it rather than just selling the whole home. And I’m seeing the fractional market really grow because people want to enjoy the property, but at the same time, they’d like to be able to enjoy the property for free each year based on other people renting their other time. So we’re seeing a hybrid evolve into people who want to have two weeks vacation in Pawleys Island, let’s say, but they don’t want to have to pay for it each year. So they rent out four weeks of their eight, seven weeks and they make their money back basically.
CORWYN:
Makes perfect sense. So let’s kind of shift this around a little bit, you know, property owners and, but our show here, we like to focus on legacy, what gets us, if you will, down the road, how does that look? How do we benefit quote unquote generations that are yet to come, if you will. So I want to ask you, well, first let me back up and kind of make sure I get this out, which is, you know, have you ever worked with or assisted someone who felt blindsided by these regulations? And if you have, then can you share a story about how this model has helped them to hold on to their property and to preserve it as a part of their legacy for their family?
DOUG:
Yeah, and that’s great. I like the whole legacy. I’ll tell you a story about that because that’s important. But also I worked with a couple of couples who got blindsided on the West Coast. It was on the West Coast, but they got blindsided. They built this whole big project. They wanted to own part of it. But they wanted to make their money. In other words, pay for it with short-term rentals. Suddenly it’s not allowed. They didn’t want to give up the property. This was going to be passed down to their children and maybe their children’s children. And so what they did is they sold shares in the property. They were able to maintain some ownership and afford some ownership, but they didn’t have to get rid of the entire property because short-term rentals were no longer allowed. I love this story a lot. I get this a lot where I grew up with going to the lake house my grandparents owned for a bunch of time each year. It was their cottage, whatever. We would all get together as a family, go to the lake house, and that was my memory. So now it’s very hard for people to afford a big enough place where they can call it their lake house or their beach house or wherever they want to go. But they do want to establish a legacy where their children can go every year to the same house and their children’s children could start going to the same house. So we see a lot of families, especially young families, buying into some of these beachfront homes and lakefront homes that we represent so that they can enjoy it generationally, year over year, because pricing has gone crazy and they can’t afford it themselves. So co-owning with a group of people gives them that same ability without having to be billionaires to own their own house.
CORWYN:
So, you know, for our show, we really focus on, again, that piece of it. And we want to see people. We’ve marched this show, quote unquote, from the starting point, which is the basics. And now we’re taking people through these various valleys and through the mountains, if you will, of building a legacy because there’s a lot of work and a lot of travel, if you will, that goes along with it. And for people to be able to buy in and own a part of something, we all have this mindset, Doug, of I want to own it. Well, sometimes it’s easier to start by owning a piece of it. If you own enough pieces, then you get to where you own a whole, if that makes any sense. So you’re seeing more and more people embrace this methodology. So before we get like really too far, let’s take this as a moment to make sure people can reach you. So Doug, where can people find you, find Plum? Where can they reach you guys at?
DOUG:
Yeah, the best place is just our website, plumcoownership.com. I’m on Facebook. We’re on Instagram, Twitter, all the socials. And it’s plumcoownership@plumcoownership. And you can reach me directly at doug@plumcoownership.com. I welcome anyone to talk to because no matter how many times I explain it, there’s still lots of questions. And when you actually get down into the details, Corwyn, there are a lot of nuances that you have to think about before entering into something like this. And we answer all those questions. We give people the confidence that they’re moving into something that is well thought out and will help them in the future.
CORWYN:
So Doug, if I could get you to give us, I’m pretty sure there’s a question that you get often, may not get it every time, but you get it often enough that you got your boom and off to the races, maybe on your FAQ. But what question do you get often from people who are contacting you about this, about potentially investing or otherwise want to explore this model as a part of their portfolio from either side, whichever side you like to respond from, whether it’s homeowner that is looking to, I want to diversify, stretch out, or whether it’s someone who’s looking to get into investing and this is the direction they take. What is that question?
DOUG:
Again, with each side of it, it’s a different question, but from the buyer’s perspective, they want to know that they truly are owning something. So if I’m a buyer and I’m buying a share in a group property, first question they ask is this a timeshare? Important to know that it is not a timeshare. You own your share of that property and it goes up in value just like any real estate. All the fees and maintenance fees and things like that are completely transparent. It’s all operated by the group. So I take people through that to help them understand that they’re not just buying a week in Jamaica and it’s immediately no value the minute I get done with it. The other side, on the seller’s side, they just want to, can I do this? Can I take equity out of my vacation property without having to give up the times and the memories that I have had here for years and years? For us to be able to help them with that and them to still be able to maintain a certain amount of time in their favorite place to go that they’ve gone year after year with their family is a good feeling. A lot of those are also happy because an owner treats the property different than a renter. Absolutely every time, different than a renter. That’s why we’re so excited because we can help these people and they come together. I hate to say it, it sounds really corny, but once you co-own a house with somebody, you almost become family in some way. It’s really fun to see one property group, their kids play together. They go up there once a year now as co-owners in the same house and they all spend one week a year as co-owners at the house. It’s just great to just see how it evolves and how it grows. But the reason why it’s so successful for them and for other co-owners that work with us is we provide the necessary expertise so that when you form the group, all possible issues are well thought out and we have accounted for any potential problems that they may run into. Now, are there ever problems still? Yeah, but we’ve thought through all the possible problems that people could run into co-owning a house and we’ve laid it out in an operating agreement that as long as they follow it, they should be fine.
CORWYN:
So Doug, I want to thank you, man. That’s great. I want to thank you first and foremost for taking time out of your busy schedule to be here on the show. This is great. So as we wrap up and close today, you know, listeners, I want to give you my takeaways and this is your action piece. So this is what I took from Doug’s advice for us all today. Regulations will change, but legacy doesn’t have to. Protect your investments by exploring creative strategies to keep your wealth working for you and for your family. So that is our takeaway today. Doug, again, one more time. God, thank you so much for being on the show with us today. I really appreciate it.
DOUG:
I really appreciate the time, too. Thanks, Corwyn.
CORWYN:
So for our listeners, guys, y’all know how I feel. Y’all know what I say. Y’all know I put the two of them things together and I give it to you this way, which is to tell you that I love you. I love you, guys, and we’re going to see you guys out there in those streets.
