The new Equity Platinum Fund will acquire 20 luxury vacation residences, each with a value between $2 million and $3 million. Some of the target locations for the new fund include Cabo San Lucas, the Bahamas, Deer Valley, Hawaii and West Palm Beach.

Equity Residences Big Island outdoor Living Room

Equity Residences launched its first fund, the Villa Fund, a couple of years ago and entered 2015 with a portfolio of 10 purchased or under contract properties. The value of the average Villa Fund property is $1 million.

"The Villa Fund's outstanding performance inspired the formation of our second fund," said Managing Director John Long.
The new Platinum Fund is planning to raise $50 million to acquire 20 luxurious vacation residences, located in coveted vacation destinations.

As with other equity destination clubs investors can use the club homes for their vacations. The fund also rents out the homes to offset the operating costs and maintenance of the homes. Investors can choose whether they want to pay an annual fee for more usage, or take the no annual fee option which gives the fund more rental time to offset costs. There's even an option to take a dividend based on excess rental income.

The founder's subscription price for the Platinum Fund is $265,000, which gives 2-3 weeks of usage each year. A 1.5 unit investment is $397,500 and provides 4-6 weeks a year, while 2 units is $530,000 and gives you 6-8 weeks of usage each year. In addition the investors have unlimited short term space available usage. 90+% of the capital invested goes directly to real estate acquisitions.

"Our business model appeals to those looking for a solid investment, as well as luxury vacations," said Managing Director Greg Salley.

Equity Residences Palm Beach home

The next two locations for the Villa Fund will be in the Florida Keys, which closes this week, and Kauai which is under contract.

Greg told SherpaReport that the Villa Fund has more than 50 limited partners, including many investment professionals from private equity firms, family offices, hedge funds and wealth management, plus lawyers, doctors, and executives. Equity Residences plans to close the Villa Fund to new investors in July.

For both of these funds, after 10 years, the properties are sold and investors receive their share of the sale proceeds.

"We focus on acquiring properties in prime locations at discounted prices to optimize long-term appreciation. Our investors like the upside, and love vacationing at the properties while rental income offsets operating costs," said Greg Salley.