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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.
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