Equity Partnering

At Lion Pride Capital Partners, we really like to create win-win situations with our customers

We are looking to assist people who may have a house in need of repair, or their having problems with their mortgage.

Now, we can come in, pick up your mortgage payments, remodel your house, and offer you an opportunity to share in the profits of your house.  This type of arrangement is known as equity partnering.

What is Equity Partnering?

Equity partnering entails selling a property that has equity (when the residence is owned outright or is worth in excess of what is owed on it) to an “investor partner” that in turn resells the home (possibly as-is or perhaps after improving it) in exchange for agreeing to share a portion of the proceeds with all the original owner.  Equity partnering is a good option for a homeowner that would like to renovate their home, but does not have the money available to do the repairs. (FYI: depending on the home, home’s location, and amount of renovation needed on the home the investor may or may not be willing to do equity sharing on a home) Renovating homes is a high risk investment, so there must be enough profit to justify the transaction for the investor.

Another type of equity partnering involves a home that does not need renovation but instead the investor partner finds a new buyer that will pay the existing mortgage going forward (see: owner financing), and then refinance the home at some point in the future, at which time any profit is shared with the original seller and the investor.

Equity Partnering Example

  • Value of House (after repairs are made): $200,000
  • Amount of Renovation/Repairs Needed: $30,000
  • Total Debt on the Home: $110,000
  • Purchase price to investor: $110,000

The investor buys the property, completes the renovation, and resells the property on the retail market to an end buyer.

  • Renovation Expenses for Investor: $30,000
  • New Buyer Price for the House: $200,000
  • Closing Costs: $15,000
  • Net Profit: $200,000 – $15,000 – $30,000 – $110,000 = $45,000
  • Profit paid back to original owner: $15,000 or more (typically one-third)

If you would like to find out more about Equity Partnering, please contact us today: (512) 296-2299