Equity partnering involves selling a home that has equity (when the home is owned outright or is worth more than what is owed on it) to an “investor partner”. The investor partner then in turn resells the home (possibly as-is or possibly after renovating it) in exchange for agreeing to share some of the profits with the original owner. This can be a good program for a homeowner that wants to renovate their home, but does not have the cash to do so.
There are many variations to this – only limited by the creativity and experience of the investor partner.
Note: depending on the home, location, amount of renovation, etc. an investor may or may not be willing to do equity sharing on a home. Renovating homes is high-risk, and there must be enough profit to justify the transaction.
Other forms of equity partnering involve homes not needing renovation in which the investor partner finds a new buyer that is willing to pay the existing mortgage going forward, and then refinance the home in the future, at which time a profit is shared with the original seller and the investor partner.
All of these transactions are fairly deal specific and fairly complex. Galveston Home Buyers has extensive experience buying and brokering homes using these types of creative financing strategies. Give us a call and we can discuss your specific situation..