A Win-Win Joint Venture Solution Misnamed “Equity Sharing”


Many Landlords fail to address the impact of negative cash flow and rarely compute their break-even when calculating their return. Investments that require constant and regular contributions of cash are usually shunned.

When negative cash is combined with the size and frequency of tenant problems, repairs, emergencies, and maintenance, investing in single family residential homes should be treated as a bad hobby or avoided completely. Many “investments” are leftovers from their former residence.

EQUITY SHARING ELIMINATES THE PROBLEMS OF OWNERSHIP for Landlords and new Investors (“Capital Investor”) while creating the path to home ownership of Buyers with “Challenges” (“Tenant Investor”). Equity Sharing eliminates the weaknesses and strengthens the capabilities of each of these participants.

This new relationship known as “Equity Sharing” has a unique operating Agreement that is constructed by the Parties themselves. IT IS NOT A PRE-DETERMINED CONTRACT. It is anticipatory in nature and is the “go to” document for relationship issues. It ends any negative cash flow or “occupancy issues” for the Capital Investor while providing on-site management, tax benefits and control. The Tenant Investor acquires a minority of the equity in the property, tax benefits, appreciation, and dignity. THE TENANT INVESTOR INTEREST IS CONDITIONAL.


A large number of potential buyers cannot squeeze into a lender’s Qualification Requirements because of typical life circumstances – divorce, a job change, un-provable or erratic income, student loans, tax liens, even short sales, and foreclosures. Many are former homeowners seeking a second chance at stability and dignity now – without loan qualification.

Their percentage of ownership has remained unchanged for 70 years.

A “Covestor” is a former renter that qualified and can purchase a percentage of ownership as a co- owner, is responsible for all of occupancy issues that have plagued property owners and investors. THE CAPITAL INVESTOR’S PROBLEMS ARE GONE.

Landlords and Investors benefit by the on-site management function of the Tenant Investor and Covest Properties relationship management function that continues for the life of the Agreement.

Equity Sharing provides healthy relationships, better investments, decreased involvement and occupancy certainty. It is a very appealing solution for heirs of property owners that would ordinarily sell.

It works because the Parties are both creators and participants. Every Equity Share Agreement is unique to the needs of the Parties. In addition, Covest Properties provides on-going problem solving and mediation support to the parties for the duration of the Agreement.

AND… There are multiple exit strategies.