The Mauna Lani Residence Fund is a real estate private equity fund that enables investors to own a luxury vacation residence on the Big Island of Hawaii with long-term capital gains potential. The home is located in the Residences of Laule’a, a private development within the exclusive Mauna Lani Resort. As equity interest holders, investors own the Fund residence and have a long-term interest in the home’s expected appreciation. In addition to financial returns through appreciation, investors enjoy the lifestyle dividend that comes with “rent free” vacations at this luxurious resort home. The acquisition, management and disposition of the home is handled for you by the General Partner, so investors can focus on enjoying time spent with friends and family.

Timeshares are typically a points-based or right-to-use, one-week product that are, in essence, a pre-purchase of future vacations. They depreciate dramatically upon purchase due to the extremely high marketing and sales costs imbedded in the price.  Even at drastically reduced prices, resale options are very limited.

Fractional ownership, including private residence clubs, does not provide a coordinated liquidation event. After project sellout all owners are responsible for their real estate sale and are competing with other fractional owners in the resale market. Many private residence clubs prohibit rentals that could help defray carrying costs.

Most destination clubs are not equity investments. They sell a right-to-use membership requiring a significant deposit that is usually backed by the company’s promise to return a stated percentage of the deposit (often 75%). The deposit may or may not be secured by real estate assets. The only resale option is through the destination club company, which is highly motivated to sell company-owned memberships, not the members’. The annual membership fees of most destination clubs are considerable and do not provide a significant savings over rental of luxury homes.

We’ve found that, on average, vacation homeowners use their second homes for 30 days or less out of a year but are burdened by annual maintenance, management and holding costs. If homeowners decide to rent their house, there are property managers and renters to deal with requiring extra time, effort and maintenance costs.

The Mauna Lani Residence Fund provides second home ownership while eliminating all the hassles and most of the expense. The Fund will own and operate its real estate investment with a high probability of appreciation during the 12-year “hold” period. Like other real estate, it is possible to sell your Fund Units through a transfer, potentially at an appreciated price. Since we are a Trust, there is no ‘middleman’ structuring the transaction and requiring its own return on investment.

The Mauna Lani Residence Fund is structured as a Delaware Statutory Trust. The DST structure allows the Mauna Lani Residence Fund to accommodate investors’ 1031 tax deferred exchanges. Through the DST, investors share ownership in the real estate with title held by Equity Residences as the Trustee. In addition, the DST structure limits the liability of investors with respect to the debts and obligations of the Trust, while providing an optimal tax structure for flow-through gains and losses.

The Fund will own one residence in a private community within the Mauna Lani Resort. The residence encompasses 2800 interior square feet of living space with a total of 4100 square feet, with four bedrooms that can accommodate up to eight people, plus four and a half bathrooms. The residence is situated along the Francis H. I’i Brown Golf Course, with a view of the Pacific Ocean from the lanai. The residence is one side of a townhouse-style duplex on two levels with a private garage and a private pool and hot tub. As owners, investors have access to a luxurious private beach club, the Mauna Lani Golf Club and the Mauna Lani Sports & Fitness Club.

As often as they wish, subject to the Fund’s reservation policies. With each Unit purchased, an investor can enjoy five weeks of Planned Vacations.

After the Planned Vacations are confirmed, investors can reserve additional lodging. With only ten investors per residence, there is abundant availability throughout the year. If some investors use less than their available time, other investors can use the home more. This enables investors to take advantage of the year-round favorable climate on the Big Island.

Each investor will enjoy the significant vacation value attributable to use of the Fund residence each year. If an investor has confirmed Planned Vacations that are not going to be used in a given reservation year, they can exchange them for Elite Alliance and ThirdHome Credits or ask the Property Manager to rent the Planned Vacation on their behalf.

Investors may ask the Property Manager to rent their Planned Vacation at any time. Any Planned Vacation may be rented. The sooner you notify the Property Manager to rent your Planned Vacation, the greater the chance your Planned Vacation will be rented. Rental income from your Planned Vacation, excluding direct costs of the reservation – such as cleaning expenses, will be used to offset your operating costs. The management company will handle the bookings and manage the guests.

Yes, your Planned Vacations are yours to use as you wish.  The Fund allows for Unaccompanied Guests to use your confirmed Planned Vacations, allowing you to give your vacation time to friends, family, or business colleagues.  You can even donate your Planned Vacations to your favorite charity.

Yes, you can bring your pet and be charged a nominal pet cleaning fee.

The Mauna Lani Resort has a limited supply of large, single-family residences available for short-term occupancy. In fact, the Laule’a development is one of the only communities in which vacation rentals are allowed within Mauna Lani. This will be an important differentiator for this home when the time comes to sell.

In addition, The Fund is purchasing the home directly from the developer at an exclusive reduced price, adding to the expected appreciation potential of the home. We’ve modeled a 1.4X return (3% to 5% annual appreciation) of capital over a 12-year hold period.

Additionally, Auberege Resorts has invested $200M+ into the Mauna Lani Resort, transforming it into one of the most refined luxury resorts in Hawaii. We anticipate an increased demand for the Mauna Lani Resort following the renovations.

Capital contributions will be used to: (i) acquire the residence, including closing costs and other acquisition expenses, and (ii) establish an on-going reserve to cover maintenance, appliances, furniture replacement and working capital.

The Fund’s investment strategy is to deploy an unlevered model.

The expected average annual vacation value based on the use of five weeks is estimated to be approximately $60,000, on average. Additional space-available stays at the residence or through ThirdHome and Elite Alliance may increase the annual vacation value.