Equity Partnership Profit Model
No Money Down Investing with Equity Partnerships
It does take money to make money … But who said it has to be your money?
Use the Equity Partnership Profit Model to purchase a property for either a short term flip or long term cash flow. The best part is, you can do this WITHOUT investing any of your own money!
What is an Equity Partnership and How is it Done?
An Equity Partnership occurs when you and a seller or investor partner agree to share net sale proceeds when you sell or rent the property to a third party. The process is simple; find a person that’s behind in their payments, offer to catch them up and when the property sells, you split the equity after you have been repaid any expenses you incurred in the transaction.
Equity Partnerships are great way to make phenomenal returns on your money within a relatively short amount of time with minimal risk. This Profit Model is very effective with homeowners who have little time to get the deal done but still want to receive cash from the sale. Your objective is to offer to purchase the property by taking over payments, giving them some cash now or reinstating a foreclosing loan in exchange for a share of the equity. And if you take the time to prepare a great buyer’s list in advance, you can have the property sold prior to even signing the contract. Pretty simple!
The Equity Partnership Profit Model is similar to the Flash Flip and Subject To. Each of these Profit Models allow you to make money in real estate without a lot of personal cash. You should use the Equity Partnership in cases where the homeowner wants to sell, but is uncomfortable with the fixed fee setup of a traditional discount purchase. The Contract Assignment is an alternative if you have a discount buyer waiting to take the deal, but your net profit will typically be lower than if you structure the deal as an Equity Partnership.
For an Equity Partnership your mission is to:
1) Find a motivated Seller of a property in relatively good condition with enough equity to make the deal work.
2) Sell the concept of an Equity Partnership where you have the seller or another investor put up the money to purchase the home or stop a foreclosure in exchange for a share of the profit when the property sells.
3) Negotiate your share of the Equity Split percentage.
4) Get all your agreements and documents signed by the homeowner.
5) Choose a Marketing Strategy (i.e. realtors, classifieds, internet, etc.) and make sure you start advertising immediately.
In the Equity Partnership, your general intention is to get the highest price from a retail buyer. Of course you can also rent or lease your Equity Partnership deal. that is as long as your partner is in agreement with you. Either way it is a good idea to be sure that you have legal control over the deal so you can make the decision on what is best for the property. Then if your equity partner decides he wants out, you can always offer his position to another investor. who knows, you may even be able to buy him out at a discount, increasing your profits even more.