Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Stock Options for Real Estate
Old 05-03-2019, 09:28 PM   #1
Thinks s/he gets paid by the post
Join Date: Nov 2011
Posts: 3,291
Stock Options for Real Estate

Don't recall this being discussed here. There are companies that buy a share of the change in value of your house. "We pay you a percent of your home's current value. You make no payment to us until you sell. If the value of your home increases from its current value, when you sell, we will share in a portion of the increase and make a profit. If the value decreases, we incur a loss. It's that simple."

The company takes an outsize share of the increase in value. The promo gives an example in which they pay the homeowner 10% of the value of the home, but they get 40% of any increase in the home's value. They also will take 40% of a loss, but only up to the value of the amount they had initially paid the homeowner.

It's like a stock option for real estate. Of course these companies look to purchase only in areas of appreciating property values. It's an interesting idea, but on average homeowners are not the ones gaining in such an arrangement.

GrayHare is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-04-2019, 05:28 AM   #2
Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 2,161
Equity sharing is back! Time to sell!!

Another Reader is online now   Reply With Quote
Old 05-04-2019, 07:11 AM   #3
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
Join Date: Aug 2006
Posts: 2,412
Back in the 1980's, the concept of a shared-appreciation mortgage (SAM) was floated, although it never really caught on in the US. The idea was to effectively increase the borrower's down payment (lowering the necessary mortgage amount) or to lower the interest rate, thereby qualifying more people for mortgages. In essence, the borrower was selling a call similar to the one OP describes, but it was built into the terms of the mortgage.
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline   Reply With Quote
Old 05-04-2019, 11:01 AM   #4
Thinks s/he gets paid by the post
Join Date: Nov 2011
Posts: 3,291
Originally Posted by Another Reader View Post
Equity sharing is back! Time to sell!!
At this point I figure it's experienced investors behind this approach. When my Uber driver tells me about it, that's when I get concerned.
GrayHare is online now   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Thinking of purchasing a real estate investment trust stock and need advice joecaf53 FIRE and Money 2 08-13-2012 03:20 PM
The REAL Real Estate Appreciation Rate honobob FIRE and Money 158 06-21-2009 09:46 AM
Real Estate Agent in Down Real Estate Market TromboneAl Other topics 4 06-09-2007 11:20 AM

» Quick Links

All times are GMT -6. The time now is 02:56 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.