Exchanging property for equity in a "syndicate"

[Michael Fundaro]

I'm just hypothesizing an exit strategy here so please humor me. My wife and I own a duplex in a residential multifamily zoning area. If done properly, the regulations allow up to 6 dwellings. Our primary plan is to hold the duplex indefinitely, but every once in a while we talk about a situation in which a developer wants our property to build an apartment building.

Selling and cashing out is obviously an option, but I subscribe to the buy and hold philosophy and I would want a piece of this apartment building action. So here is my hypothetical deal:

This is in the future and assumes I would own the property outright. "Apartment Builders, LLC" offers me $X for the property. I say deal, but instead of cash we'd just transfer ownership in exchange for whatever equity stake $X gets me in this venture.

This substantially lowers the amount of cash they need to put into the deal, but it's not owner financing, I would now be a partner in a syndicate (am I using that term correctly?) and instead of collecting interest on a finite loan I'd be collecting a share of the profits indefinitely.

Am I making sense to anyone? Is this silly? Has anyone structured a similar deal? Can anyone weigh in on how this might go if I still owed on the mortgage?

Thanks!