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From: shelby@rtech.ARPA (Shelby Thornton)
Newsgroups: net.invest
Subject: Re: Equity Sharing... Advice needed..
Message-ID: <346@rtech.ARPA>
Date: Thu, 2-May-85 14:05:40 EDT
Article-I.D.: rtech.346
Posted: Thu May  2 14:05:40 1985
Date-Received: Sun, 19-May-85 07:11:45 EDT
References: <159@mcc-db.UUCP> <2899@hplabsb.UUCP>
Organization: Relational Technology, Berkeley CA
Lines: 44

> 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.

The last name is Simon with one 'm', and he lives in Arizona.

> What I remember is:
> 
> 	The investor puts down the down payment and gets to depreciate
> 	the property.

The investor can only depreciate the portion of the house that his "partner"
owns.

> 	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.

Again, each partner gets to deduct his percentage of ownership.  If it's
50/50, each partner deducts 50% of the interest.

> 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. 

Not true, the investor could only sell his half, not the whole thing since
both names are on the deed.

Essentially what you are doing is working a single family home like a Duplex.
The investor definitly gets more tax breaks, but he should, it's his deal.  He
depreciates half the house, gets to write-off half the interest paid, and half
of any maintenance costs.  At the end of the deal, he gets his down payment
back plus half the equity (the down is subtracted out of the equity first).

The live-in partner gets a home, with nothing down, to live in, and gets to
write-off half the interest and maintanence, with a very reasonable return
on their investment upon sale.  A win/win situation.


					Shelby Thornton
					{amdahl, sun}!rtech!shelby
					...ucbvax!mtxinu!rtech!shelby