22 Feb 2013

What is Equity Partnering?

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equity partneringSuppose that you have a house that has a lot of equity in it…

But it requires repair to get it up to market value.

You have a lot of wholesalers come to your door an offer you cash for a 50% discount, but you this isn’t exactly what you’re looking for.

What other options do you have?

Equity partnering may be the best case scenario for you.

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.

Benefits to Homeowner:  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).  The homeowner doesn’t risk any time or cash for the renovations and allows the expert to do all the work and sell the house.

Detriments to a Homeowner:  Renovating homes is a high risk investment, so there must be enough profit to justify the transaction for the investor.  While this type of transaction is more profitable than a straight wholesale, it will take more time and there is more risk in this strategy.  The best case scenario for the homeowner is to fix up themselves to sell for maximum value, but if this option is not a possibility, then equity partnering is still a great way to go.

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.

Lion Pride Capital Partners: We really like to create win-win situations. 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.

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

About the Author

Robert Guild has been the financial expert and the controller for both public and private companies for decades. Robert is now the co-founder of Lion Pride Capital Partners. At Lion Pride Capital Partners, we’re a team of investors. If you wanted to describe us in a couple of words, it would be: Expertise, Experience, Funds, and Network. We have experienced cash buyers and a construction manager who has been building and remodeling homes for over 20 years. We have a Realtor/Investor who finds us properties and markets our finished properties for sale. We also have a top mortgage banker with an extensive real estate portfolio and has been investing in real estate for over 20 years. I also have real estate investment mentors who are the most successful investors in Central Texas. We also have access to investor friends around the country so that together we can provide pretty much any solution to any problem in real estate for about any seller in about any situation. Regardless of your situation, we can help! Contact us today.

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