M Private Residences
Resignation and Redemption

Experimenting with different redemption models during their existance, M Private Residences currently uses a model that charges an 8% transfer fee for each of their three membership plans. In effect, members receive 92% of the current value of their membership if they resign.

The club had previously used a model where club members was allowed to set their own price for how much they would be willing to sell their membership for. In a unique redemption model, new members came to the club and made an offer to the club for the membership plan they sought. The club would then go to the first person on the club's resignation list to see if that member would accept or deny the offer. If they member accepted the offer, they would sell their membership for that price and the new member would join the club. If the member denied the offer, it would go to the next person on the resignation list for the same process. If the offer was not accepted by anyone on the resignation list, the process could start again with a new offer.

"We are selling equity," began Co-Founder and President Paul Poscente regarding the new resignation structure. "You need a bid and you need an offer. Arbitrarily setting a price not connected to the market doesn't make sense. Also, in an environment where all you are doing is selling shares, in a low growth environment like we face globally, you want the highest level of liquidity offered to shareholders."

Prior to the resale option, the club also used a format similar to the one currently being used. When a member joined, if they elected to sell that day, they would receive 80% of their original membership deposit. After that, the club would tie the refundable portion of the membership deposit to the quantity of homes in the real estate portfolio. If a member elected to stay until the club reached it's property capacity of 60 properties, they would be able to receive 96% of their membership deposit if they elected to resign.

To learn more about M Private Residences, please request a free copy of our Destination Club Guide.