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From: hodor@hplabsb.UUCP
Newsgroups: net.invest
Subject: Re: Equity Sharing... Advice needed..
Message-ID: <2899@hplabsb.UUCP>
Date: Thu, 25-Apr-85 12:46:51 EDT
Article-I.D.: hplabsb.2899
Posted: Thu Apr 25 12:46:51 1985
Date-Received: Sun, 28-Apr-85 06:34:54 EDT
References: <159@mcc-db.UUCP>
Organization: Hewlett Packard Labs, Palo Alto CA
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I have heard several ways of structuring equity sharing deals in real
estate.  The most attractive and in my opinion the most equitable is what
I heard from a television program by Paul Simmon (I may be wrong about the
last name).  He is an investor that works equity sharing deals exclusively.

What I remember is:

	The investor puts down the down payment and gets to depreciate
	the property.

	The person that lives in the house pays the payments and makes
	all repairs and maintains the property.  Since he is making the
	payments the interest deduction is his.

	The deal can be written for a finite period of time or written 
	based on some other termination of a contract.

	The increase in equity is shared 50/50.  This means when the 
	property is sold the resulting gain in property value is split.
	The investor gets his down payment back and 50% of the gain in
	the property value.  The person that lives in the house gets
	the amount he has paid off in the principle and the other 50%
	of the appreciation in the property value.

The law seems to be very flexible currently.  This type of financing
should allow many other people to buy a home.

The only problem that I have heard of is that of attaching leans to the
property by either person.  If either gets sued that property may have
to be sold.  If the investor gets sued the house may be sold out from 
under the person living in the house. 

I would be interested in anyone elses comments on equity sharing.  I am
currently considering this as an option for some future investments.

Ken Hodor
hodor!hplabs