Owner to retain some equity

[Nathan Jackson]

Hey guys,

So I've been looking into getting my first deal when a family member mentioned wanting out if their house.

They are willing to sell it way below market value to me, but there is one stipulation.

The property rests between two major shopping centers and there is a good chance that a commercial investor buys the neighborhood for a big lump sum. My family member wants a % of the profit if/when a commercial buyout we're to happen.

Im new to this, so I may be way off base ... But I thought I could likely write in an owner equity share clause into the contract. It will likely be seller financed, so I won't have to deal with the bank on this either. Anyone have experience in having the seller retain a bit of resale equity?

[Don Konipol]

You are actually not looking at your relative maintaining an ownership interest.  Ownership of property is actually a bundle of rights.  Your warranty deed can state that the seller is due a percentage of any profit from the resale of the property within a certain time frame.   This becomes a deed restriction.