Many equity share agreements provide the investor will participate in major repairs. The occupant hopes that his share of the appreciation will be enough to repay this deficiency together with his closing costs and the costs of sale. Obviously, the longer the agreement runs, the better the occupant's chances of making a profit. The method of defining and dividing profit is even more important than the length of the agreement. The new joint ownership agreements fall into two broad groups dividing either the equity or the profit.
Some agreements divide the equity in the property.
These do not repay the occupant his closing costs or the principal amortization. The investor receives a return of the down payment, then the loan is paid off, then the equity in the property is split. Such agreements do not generally favor the occupant. The occupant will not receive enough to reimburse the original closing costs, rent deficiency and costs of sale unless, they run for longer than five years and real estate appreciates at high rates. The property must appreciate by twice the amount of these costs because the occupant only gets half the appreciation.