New spin on Equity participation financing

[Jay Hinrichs]

https://www.foxbusiness.com/mo... When the prices of SFR s in the Bay area and specifically on the Peninsula from Marin county to los Gatos sky rocketed in the later 80s.. IE homes shot up to 350 to 600k in those areas basically 2X and 3x appreciation from 80 to 87 ish.. Investors were doing the same thing.. you had plenty of bay area folks with great fico and could make payments, but back in those days you needed 10 to 20% down so you really needed 50k to 200k in cash to buy a home.. so investors swapped the cash for 50/50 on the equity although the folks that I knew that did this had a 5 year time line to refi or sell.. depending on the cycle you can hit it big or it can be a bust but I would think if its a bust then the equity company just extends their contract instead of taking a beating.

With all the VC money coming into the space you have old models being reintroduced as new models.. like BRRR which is a very old model and also you have the I buyers working Vegas and Portland and many other markets