Vessel Tutorial

Explore

Tutorial of Math

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:

⁠

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.

Gallery

Want to print your doc?
This is not the way.

Try clicking the ⋯ next to your doc name or using a keyboard shortcut (

CtrlP

) instead.