Equity Sharing 101
What is Equity Sharing?Simply put, it is the process of EXPANDING on what we have been lulled into accepting as the only way to finance property. Rather than purchasing a home with two involved parties, i.e. the bank and yourself, a 3rd party becomes involved. In the process of doing so, the burdens of qualifying, coming up with a downpayment and making monthly mortgage, tax and insurance payments are RADICALLY REDUCED.
What this means is that more folks can buy, those who buy won’t have to hock all their belongings and income just to pay the mortgage, and investors who likewise have “gone it alone” will now have a much lower risk real estate investment profile.
Yes, Virginia, there is a downside, and that downside is that the investor perhaps won’t make 20% ROI, but rather 10%, and the occupier of the home won’t necessarily see a profit of $200,000 in 5 years, but perhaps only $100,000. You see, SHARING makes sense when parties want to cooperate to bring common sense to purchasing and selling real estate.
Equity Sharing is, and rightfully should be, a mainstay in the playing field of any potential seller or buyer of real estate. In Equity Sharing 201 we’ll talk about who can benefit from this approach.
By Don Reedy