What
is Equity Sharing?
Equity
Sharing is the sharing of equity of real property by two or more
parties for a mutually agreed period of time.
It matches a qualified homebuyer with an investor who contributes
the down payment. The investor may be a cash investor or the seller
of the property contributing their equity (No out-of-pocket cash.)
as the down payment for the buyer.
In
return, the investor retains an ownership position in the property.
Since there are multiple parties involved, a formal "Equity
Share Agreement" defining the terms and conditions agreed
to by the parties should always be in place.
Our
Role
FRENDCO
Facilitation Services’ role is that of a creative intermediary
that provides the "Equity Share Agreement".
We
believe as home prices continue to rise and more buyers are forced
out of the housing market this will become an important option
for real estate to be transacted in the 21st century.
James
A. Walker, Attorney at Law
Speaks Out
"I
was altogether unprepared for the scope of service and creativity
that Frank brought to my situation...
The
process posed some formidable challenges. These were all solved
by Frank’s skillful education and demonstration to those involved
in finance that creative solutions work not only conceptually
but also on a dollar and cents level.
Frank
can tell you how skeptical my wife and I were. Now that the process
is finished and we have seen him work, I can tell you how certain
we are that there is any way possible, Frank can make it work.
But
having said this, I should warn that Frank’s definition of the
word “possible” may be more broad than you expect."
For
more Testimonials Click
Here
RECO
(Resident Co-Owner)
During
the agreement period, the homebuyer lives in and enjoys all the
comforts of home ownership, and pays the normal expenses including
principle, interest, taxes, insurance, maintenance, and upkeep.
They also benefit from tax deductions based on the loan interest
and property taxes they pay.
INCO
(Investor Co-Owner)
Since
the down payment provided by the investor is an investment and
not a loan the homebuyer usually makes no monthly payments, so
their finances are not negatively impacted.
The
investor’s investment is similar to buying stock in the
stock market. Their return is based-upon their expectation that
the property will increase in value over the next number of years.
Agreement
Term
When
the agreement matures, the homebuyer has enjoyed home ownership,
and assuming the home has appreciated sufficiently the homebuyer
may have accumulated a nest egg that could allow them to purchase
another home on their own.
The
homebuyer then has the option to either 1) refinance, buy out
the investor’s interest and remain in the home indefinitely
as sole owner or 2) the parties can decide to sell the home on
the open market, pay off all encumbrances, and each reimbursed
according to their respective ownership position and cash outlay.
Program
Benefits
This
program offers buyers in need of assistance, a springboard or
stepping-stone that can help get them off the rental roles and
achieve the American dream of home ownership.
The
Investor has helped someone in need and made a potentially good
real estate investment that also offers tax benefits plus participation
in future appreciation.
In addition, investors have none of the costs or management hassles
associated with owning rental property. Upon the term of the agreement,
they may also take advantage of depreciation benefits and defer
capital gains taxes via the Internal Revenue Code 1031 exchange.
Owners
of rental property can be better off financially owning 50% of
2 properties with an Equity Share arrangement, than 100% of 1
property the conventional way.
With
an Equity Share arrangement, the residant co-owner has all the
financial responsibility. They pay all the taxes, insurance, utilities,
maintenance and upkeep.
What
is it worth to an Investor of rental property to not receive any
phone calls from a residant because something had to be fixed
or replaced? As they say, "Time is money!"
Note:
The previous description is a basic overview
of our program. For more details click on the available links above
or e-mail FRENDCO.