Equity splits are another way creative real estate investors make money. This can be done with just about every property investment strategy there is. Basically the investor uses equity splits as a negotiating tool to make money selling an investment property. This is done with a partner. It could be done with a fellow investor or with the seller if the seller is motivated enough. Many investors that use the lease purchase strategy use equity splits in their deals.
The investor can negotiate a better final buying price from the seller. The investor and the seller then negotiate on what percentage each gets from the re-sale of the property. It could be 50/50 or 75/25, it doesn’t matter.
This percentage is based on anything above the initial selling price to the investor. If the motivated seller sells the property for $200K to the investor, they would then split the amount above $200K that the investor later sells the property for. If the investor sells the property for $250K, they would split $50K.
There is no limit to the amount of ways you can structure these deals. Just make sure you structure them so that first, you can make money, and second, that the sellers are happy.
