Conversion to Equity

⁠

Overview⁠

> Basics >

Conversion to Equity⁠

⁠

At the property owner’s discretion, a portion of the annual income may be paid with additional equity sharing percentages. The underpaid amount (amount owed - amount paid) is divided by the

then-estimated home value⁠

to produce the increase the equity sharing percentage for that year:

⁠

In other words, any amount the property owner opts not to pay of the annual payment they owe in a given year is automatically reinvested into the property, increasing investors' equity sharing percentage.

Try it out:

Income Payment Owed

00000

23000

⁠

Income Payment Made

⁠

00000

6000

⁠

Estimated Home Value⁠

at Year End

0000000

560000

⁠

Underpaid Amount

17000

⁠

Equity Sharing Percentage Increase

= $

17000

⁠

/ $

560000

⁠

3.04

⁠

So, if at the beginning of one period, the

equity sharing percentage⁠

were 10%, the equity sharing percentage would be

13.04

⁠

% at the beginning of the next period.

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