EquityKey : "Alternative to Reverse Mortgages"

Simply put the EquityKey is a program for senior homeowners age 65 and older who wish to access money today for exchanging a portion of their future home value. This real estate option is not a loan. There are no monthly payments or interest charges. Unlike Reverse Mortgages, the EquityKey has no closing costs and does not affect current equity in the home. Homeowners keep their existing equity, and the investor takes the risk, believing that the money paid today will be recouped through future long-term growth in property values. Because EquityKey is not a loan and does not affect a homeowners current equity position savvy seniors are often attracted to this powerful program for investment purposes. The investor is purchasing a percentage of the future and unknown appreciation of your home and the money paid to you is yours to keep. For each qualified homeowner, the lump sum offered will be between 10%-15% of the home’s appraised value (20%-30% if 2 qualified homeowners participate).

Program Features:

  • Eligible Properties: Primary, Investment, Second Homes & Commercial Real Estate
  • Maximum allowable 1st TD Lien 80% of property Value (LTV)
  • Combine Multiple Properties (cross collateralize)
  • Money received is NOT a debt and does not affect current equity positions
  • No Closing Costs ($300 Refundable Application Fee)
  • EquityKey accepts the risk of the real estate depreciating in value.
  • If the property loses value at the time of death or sale, then EquityKey will lose the money they paid them.
  • Minimum Property Value $500,000
  • Minimum Age Requirements: 65-85Yrs

EquityKey Calculator (2 Applicants Estimate x2 the proceeds!)
Would you like to know how much income you may qualify to receive from EquityKey ?

Estimate Your Home's Value:

$

Enter Your Age (65-85 applicable):

   


Lump Sum Payment: $ to $


* All projected income is subject to age, home value, and health qualification guidelines.  You may or may not qualify to participate in this program.

Example Home Value $750,000

One Qualified Owner - Exchanging 50% of future home value

10% - 15% of Total Property Value = $90,000 - $112,000

Two Qualified Owners – Exchanging 100% of future home value

20% - 30% of Total Property Value =  $180,000 - $225,000

Example Home Value $2,000,000

One Qualified Owner - Exchanging 50% of future home value

10% - 15% of Total Property Value = $240,000 - $300,000

Two Qualified Owners – Exchanging 100% of future home value

20% - 30% of Total Property Value =  $480,000 - $600,000

* Shown for illustration purposes. Actual amount paid depends on the health and age of the homeowner as well as the condition and location of the home.

Downloads & Resources:

coming soon...

Frequently Asked:

How does EquityKey make money?

Beleiving that the growth of real estate will outpace the payments are made to clients. The EquityKey program is willing to invest money today to share in the potential profit of the future. The investor realizes its profit by purchasing the home at the end of the agreement.

What is the Participation Rate?

The Participation Rate is the percentage of the appreciated value of the participant’s home which they agree to share with EquityKey , either: 1) when they sell the home, or 2) when they pass away. For a single qualifi ed homeowner, the Participation Rate is 50%. If there are two homeowners and both wish to participate and are qualified, the Participation Rate can be 100%, and both would receive payments from EquityKey .  For instance, for a single qualifi ed homeowner and a 50% Participation Rate, EquityKey will receive 50% of the increased value of the home when the owner passes away or sells the property.

How much money will I receive in the Program?

The dollar amount of the lump sum is based primarily on the current value of the home, the Participation Rate, and how well the client(s) can qualify for life insurance. For each participant, the lump sum option is between 10%-15% of the home value (20%-30% if both participate).

Do I ever have to pay the money back?

No, as long as you keep up your end of the bargain. The money received is not a loan, line of credit, or debt of any kind. Participants receive a lump sum or monthly payments in exchange for the future and unknown appreciation of their home. Please refer to the contract for a complete description of your responsibilities as a homeowner in the program.

What happens to the home?

Plan participants maintain their rights and obligations as homeowners as long as they own the home and throughout their life, regardless of whether or not they continue to reside in it. The interest is its share of the future appreciation above the initial appraisal value. To realize this share of appreciation, the investor purchases the home upon the client’s death, and also has a right to buy the home should the client choose to sell before his or her passing. Regardless of when EquityKey buys the home, we do so at fair market value minus our share of appreciation and acquisition costs.

What responsibilities will I have after signing the Investment Agreement?

Call for a complete list of your obligations which include, but are not limited to:

 Because you will have additional obligations, you should carefully review the EquityKey Investment Agreement with your own advisors to ensure that you understand all of your obligations.

 

For Estate Planning:

Providing an entirely new estate planning tool for high net-worth individuals. The estate option is designed for clients whose home is typically valued at $2 million or more, and who possess a net-worth of at least $5 million. Our clients receive a lump-sum payment, based, in part, on how many homeowners are participating, and in exchange, they share any future appreciation . If one homeowner participates, 10% to 15% of the current value of the property is paid today, and evenly divides the future appreciation with the client. If there are two qualified homeowners, and both choose to participate, they would typically collect 20% to 30% of the property's current value now, and EquityKey would receive 100% of any future appreciation.

The program enables you a new way to address common estate planning hurdles, including a lack of liquidity, cash flow constraints and an aversion to additional debt. By entering into an option agreement, estate clients have been able to address one or more of these issues. In addition to these estate planning issues, there are some very practical -- and even enjoyable -- applications for the shared appreciation real estate option. Some clients have used the funds they received to diversify their assets. Some have chosen to invest in other real estate while some have invested in various financial markets. Other estate clients may pursue the option in order to experience the benefits of charitable giving now, while they're in a position to witness the fruits of their generosity. If you are a potential client for EquityKey Estate, we encourage you to work with your financial advisor in determining how this product works best for you.

For Commercial Properties

EquityKey Commercial enables property owners to receive cash today in exchange for the future appreciation of a wide variety of one or more commercial properties, typically valued at $5 to $30 million.Our clients receive a lump-sum payment and in exchange, they share any future appreciation with shared appreciation. The result is a highly flexible real estate planning tool, enabling owners to increase liquidity, improve cash flow, and affectively manage and utilize their real estate asset -- without acquiring additional debt.

There are many practical applications for the EquityKey Commercial real estate option, which is sometimes paired with residential options to extend the benefits to several properties in your real estate portfolio. For some clients, it's an opportunity to diversify their assets, such as investing the funds in other real estate or in financial markets. The program has also benefited people in more personal ways, such as providing additional funds for charitable gifts that can be made today, enabling our clients to witness the results of their largess during their active years. If you own commercial property we encourage you to involve your financial advisor in determining how the commercial option can best work for you.

Guidelines:

 

Underwriting Guidelines

 

 

Residential Property ----------------------Commercial Property

Client Profile:

Age: 65-85 (No Age Exceptions)

Same

Acceptable Property Types:

· Single Family Homes · Condominiums · Townhomes · 2-4 Unit Residential · Raw Land (over $3,000,000 in value) · No Mobile Homes of any type · No Co-Ops · Fee Simple Only, No leased land

· Apartment Buildings · Multi-Family · Warehouse Distribution · Mixed-Use Commercial/Residential · Light Industrial · Professional Centers · Medical Office · Office Building · Office Condo · Retail - Shopping · Raw Land -$3,000,000 min value

Existing Property Liens

Neg Ams are OK to 65% LTV after max gross up Reverse Mortgages are not allowed

 

Option Range:

(Assumes 50% Participation)

10%-15% of Initial Aggreed Upon Fair Market Value

8%-12% of Initial Aggreed Upon Fair Market Value

Property Values:

$500,000 to $30,000,000, $350,000 in FL

$2,000,000 to $30,000,000

Property Locations:

AZ, CA, CT, FL, MA, NJ, NY, NV, OR & WA

AZ, CA, CT, FL, MA, NJ, NY, NV, OR & WA

Loan-to-value:

80% Max LTV (1 Qualified Homeowner) 70% Max LTV (2 Qualified Homeowners)

Same

Occupancy Requirements:

Non-Owner occupied accepted

No vacant properties

Ownership Requirements:

Applicant must own at least 33% of property. Eligible for purchases.

Same

Non-Applicant Owners:

Must sign Letter of Intent to be party to EquityKey transaction prior to EquityKey underwriting transaction.

Same

Fees:

$300 Refundable Deposit. Client will be reimbursed deposit if deal funds or if EquityKey cannot fund. No refund if client backs out for any reason.

$300 Refundable Deposit. Client to pay for one of the two appraisals. Client will be reimbursed deposit if deal funds or if EquityKey cannot fund.

Insurance Underwriting

Health:

Standard health or better (EquityKey must be able to purchase acceptable insurance hedge)

Same fg-9.12.08

Net Worth:

Client’s net worth:50% of Initial Fair Market Value Preferred but not required

Same

 

For Real Estate Professionals

We are an EquityKey Certified Broker actively building a network of referral partners. Find out what this program can do for your clients today. Call today and request an Application Package. (888) 801-2762 Ext 702

equity key certified broker

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