Law Office of Marilyn Sullivan Law Office of Marilyn Sullivan Law Office of Marilyn Sullivan
Law Office of Marilyn Sullivan

Equity Sharing
Asset Protection
Estate Planning
Spiritual Advocacy
Products
Contact Us
Home Page

Sample Transaction [Traditional Equity Share]


Initial Purchase

Purchase price $350,000
Investor funds (17%) $60,000
Occupier funds (3%) $11,000
80% loan at 7.5% fixed $176,000
Term 5 Years
Ownership split Occupiers 55% / Investors 45%
§280A rental $500/mo. / $6,000/yr.
Projected annual appreciation rate 6%
Projected annual return to Investors 18%

Deductions

Occupiers Yearly/Term

Mortgage interest $17,600 yr./ $88,000 5 years
Property taxes $ 3,860 yr./ $19,300 5 years
Total $21,460 yr./ $107,300 5 years

Investors Yearly/ Term

Depreciation deduction $ 4,200 yr./ $21,000 5 years

Five-Year Buyout of Investors

Appraisal (assuming 6% annual appreciation) $468,000
Less Loan payoff -$261,000
Equity $207,000
Less Return of investment to Investor - $ 60,000
Less Return of investment to Occupier - $ 11,000
Less Loan principal reduction to Occupier - $ 18,000
Net equity $ 118,000
Investor interest x 45%
Investor share of equity $ 53,000
Return of Investor down payment $ 60,000
Buyout of Investors $ 113,000

Five-Year Refinance By Occupiers

Appraisal (assuming 6% annual appreciation) $468,000
80% refinance x 80%
Loan proceeds [$94,000 equity] $374,000
Less Loan payoff - $261,000
Net proceeds $ 113,000
Investor buyout - $ 113,000
Occupier equity: $94,000

Five-Year Buyout of Occupiers

Appraisal (assuming 6% annual appreciation) $468,000
Less Loan payoff -$261,000
Equity $207,000
Less Return of investment to Investor - $ 60,000
Less Return of investment to Occupier - $ 11,000
Less Loan principal reduction to Occupier - $ 18,000
Net equity $ 118,000
Occupier interest x 55%
Occupier share of equity $ 65,000
Return of investment to Occupier - $ 11,000
Loan principal reduction to Occupier - $ 18,000
Buyout of Occupier $ 94,000

Five-Year Refinance By Investors

Appraisal (assuming 6% annual appreciation) $468,000
80% refinance x 80%
Loan proceeds [$94,000 equity] $374,000
Less Loan payoff - $261,000
Net proceeds $ 113,000
Occupier buyout - $ 94,000
Investor proceeds from refinance: $9,000
Investor equity: $94,000

Five-Year Sale

Occupier pays sale costs:

Sale price - 6% annual appreciation $468,000
Less Loan - $261,000
Less Occupier-paid closing costs (5.5%) - $ 26,000
Cash proceeds $181,000
Investor proceeds: $113,000 (see above)
Occupier proceeds: $68,000

Splitting sale costs

Sale price - 6% annual appreciation $468,000
Less Loan - $261,000
Less Seller-paid closing costs (5.5%) - $ 26,000
Cash proceeds $181,000
Less Return of investment to Investor - $ 60,000
Less Return of investment to Occupier - $ 11,000
Less Loan principal reduction to Occupier - $ 18,000
Net equity $ 92,000
Investor interest x 45%
Investor share of equity $ 41,400
Occupier share of equity (55%) $50,600
Investor proceeds: $60,000 plus $41,400 = $101,400
Occupier proceeds: $11,000 plus $18,000 plus $50,600 = $79,600

This is a sample print out from the equity share calculator which can be purchased by clicking on the Products page.