Vessel Tutorial
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Vessel Tutorial
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Conversion to Equity

At the property owner's discretion, the annual payment may be "paid" in part or in full with additional equity rights granted to the investors. The amount "underpaid" (i.e. the amount owed minus the amount paid with cash) is converted to additional equity sharing rights at the end-of period interim home value.
Equity Sharing Increase at year n = Underpaid Amount at year n / Interim Home Value at Year n
Next Topic:
Owner-Caused Value Changes
⁠
⁠
Adjust the sliders below to try it out.
Input:
Income Payment owed
$
00000
2500
⁠
Income Payment made with cash
$
0000
1100
⁠
⁠
Interim Property Value at year end
$
0000000
550000
⁠
⁠
Output:
Underpaid Amount
$
2500
⁠
- $
1100
⁠
⁠
= $
1400
⁠
⁠
Equity Sharing Percentage Increase
= $
1400
⁠
/ $
550000
⁠
⁠
=
0.25
⁠
%
So, if at the beginning of one period, the Equity Sharing Percentage were
10
⁠
%, then the equity sharing percentage would be
10
⁠
% +
0.25
⁠
% =
10.25
⁠
% at the beginning of the next period, which would be used to calculate next period's annual fee and also used to calu
Next Topic:
Owner-Caused Value Changes
⁠
⁠

More Info About 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
interim home value
⁠
to produce the increase the equity sharing percentage for that year:
⁠
image.png
⁠
⁠
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 for the next year.
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