Is equity sharing a good idea?
Equity sharing is not as popular in a slowly appreciating real estate market as in a rapidly appreciating one (when equity investors are easy to find). Nevertheless, a form of equity sharing called tenants-in-common partnerships is becoming more popular, particularly in high-priced markets. First-time buyers are the most interested in TIC arrangements because it gives them a way to buy property collectively with an unrelated partner. Loan underwriting standards are more complicated in TIC deals because lenders have more than one party’s financial situation to assess. But many standard loan programs do apply.
