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Equity Exchange Program
Equity Sharing
Equity Sharing Percentage
Definition
Equity sharing is one of the two main features of home investments through Vessel. When we refer to “buying" or "sharing" equity of a property, what we really mean is buying contractual rights to a percentage of the eventual gross sale price of the property. The initial Equity Sharing Percentage is determined as such:
For example, a $100k investment into a property appraised at $400k would produce an initial Equity Sharing Percentage of 25%.
Demonstration
Try it out for yourself by adjusting the sliders below to see how the equity sharing percentage is calculated:
Appraised Home Value
$
0000000
400000Investment Amount
$
000000
100000Equity Sharing Percentage:
= /
100000
400000
=%
25
Proceeds from Sale
Definition
To calculate the amount the investors are owed at the time of sale (or ), multiply the equity sharing percentage and the gross sale price of the property. Closing costs are paid entirely by the property owner.
Demonstration
If the property, originally appraised at , sells for:
400000
$
0000000
500000then, given the% Equity Sharing Percentage assumed in the previous section, the investor is entitled to:
25
= % x $
25
500000
= $at the time of the property's sale.
125000
Notes:
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