Vessel Tutorial

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Tutorial of Math

Equity Sharing Percentage

Investors are entitled to a portion of the eventual gross sale price of the property. While this portion

can increase⁠

, the initial equity sharing percentage is simply the investment amount divided by the initial appraised value.

Next topic:

Interim Home Value⁠

⁠

Adjust the sliders below to try it out.

Input:

Investment Amount:

000000

50000

⁠

Initial Appraised Home Value:

0000000

500000

⁠

Output:

Equity Sharing Percentage:

50000

⁠

500000

⁠

10

⁠

Input:

Property sells for:

0000000

600000

⁠

Output:

Investor proceeds at time of sale:

10

⁠

% x $

600000

⁠

= $

60000

⁠

Next topic:

Interim Home Value⁠

⁠

More info about Equity Sharing

Equity Sharing Percentage

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%.

Proceeds from Sale

To calculate the amount the investors are owed at the time of sale (or buyout), multiply the equity sharing percentage and the gross sale price of the property. Closing costs are paid in full by the property owner.

⁠

Notes:

If this amount is greater than the sale price minus the balance due to any mortgage lenders in first position, then this amount would be the balance remaining after all mortgage payments are made.

The Equity Sharing Percentage can increase during the life of the investment through

conversion of income to equity⁠

at the property owner's discretions

This is not an actual purchase of equity; however, it uses

legal structure⁠

to simulate something similar.

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