The Equity Builder™ Program provides opportunities through various structures for builders, partners, clients and prospects to purchase or build a building instead of paying rent.

In today’s and the future’s challenging commercial property market and regional economy, it can be difficult to sell buildings/property in the timeframe owners have established.

If you are the listing agent of a building and want to sell it today, the "Equity Builder™ Program" can help you do that, while also providing a future opportunity to benefit from today’s sale through equity in the LLC used to purchase the building.

Key points and framework:

• The purchasing LLC and the property/building owner agree to a price to complete the sale within the timeline of the owner.
• The LLC purchases the property and provides the owner with the proceeds from the sale.
• The original owner will receive a percentage of the LLC based on a negotiated value between the purchase price and the agreed value of the building at the time of the purchase.
• For example, the purchase price is $475,000. The agreed value of the building is $550,000.  The original owner has two equity options. They can receive the full equivalent of $75,000 of ownership as an at risk member in the purchasing member’s portion of the LLC.  Alternatively, a negotiated not at risk percentage can be established between the purchasing LLC and the original owner.
• At the end of the term; usually 10-12 years, when the building is paid off and the LLC partner buys out the finance partner, the original owner will receive a payment equal to their percentage of ownership. Of note, at the end of the term, when the buyout option is exercised, the purchase price is based on a mutually acceptable MAI appraisal.
• The above provides a method for the owner to sell their building today. It also can reduce transaction costs for the sale.
• Additionally, it provides them a deferred benefit in the future based on the possibility of improved economic conditions and building valuations. Lastly, it could limit their tax exposure based on the initial sale of their building.