Workouts: a borrower's guide to shared appreciation formulas

Article Abstract:

Real estate loan restructuring involves two formulas for debt servicing derived from property earnings. One is for the payment of part of the cash flow from operations, while the other is for the payment of a share of the asset's increased value upon its sale. Basically, the shared appreciation formula provides additional interest for the creditor, computed as a percentage of the sale price excluding deductions. It is used to ease cash flow problems caused by high interest rates. Problems in developing the shared appreciation formula are discussed. Borrowers are also briefed on what provisions to watch out for in shared appreciation contracts.

Finance, Mortgages, External debt relief, Debt relief, Debtor and creditor

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Squeeze-down formulas: do they work the way you think they do

Article Abstract:

The use of squeeze-down formulas where each partner is motivated to contribute added capital must be carefully designed to avoid problems such as unexpected taxes. The incentives in creating the formula should be defined to be able to answer ot possible issues such as profits. The formula should also be designed in a manner that is easily applicable and suits the laws.

Real estate agents and managers, Real Estate Management, Activities Related to Real Estate, Models, Real estate industry, Capital investments

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Workouts: a borrower's guide to shared appreciation formulas

Article Abstract:

Shared appreciation formulas for real estate computation can be confusing because of the infinite options involved. Contingencies, no matter how hypothetical should be considered but not to the exclusion of easy-to-understand simple solutions. A straightforward approach that proves to be applicabble benefits all.

Loans

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