An owner of a property, appraised at $2,000,000, proposes a 5-year offering to raise $400,000 (20% of the value of the property).
- One, or many investors, agree to fund the $400,000
- At the end of the five-year term, the property is appraised again and appreciated by 10% to an ending value of $2,200,000
- Because investors funded 20% worth of equity, they split the same 20% of the final value of $2,200,000, or $440,000, proportionally (minus platform fees).
- Conversely, if the property’s value decreased by 10%*, to $1,800,000, the investor(s) will still be entitled to the same 20% of the property’s final value, or $360,000. There is a risk for investors, who share in any gains, as well as losses.
- At the end of the term the issuer (owner) will either create an equity event or repurchase the equity, at which time investors are paid proportionally**.
Note: This is a simplified example and does not include all steps or scenarios.
*The value the real estate can decrease more than 10% and, like all investments, investors are at risk of losing part or all of their investment.
**Invown Funding Portal LLC does not charge investors any fees associated with post investment disbursements.