How can you sell partial equity in a residential property?

IQ: How can you sell partial equity in a residential property?
I co-own a house with one other person (not a spouse). I want to sell the house and move away, but she doesn’t. Legally I can’t force her to sell, but I’ve heard I can sell my portion of the equity to someone else so they will become part owner instead. Can this be done? What sorts of people/organizations would make such an investment? How big a discount would I have to give the buyer off of the equity?

Professional answers please. If you have no knowledge about this please do not answer.

Answers and Views:

Answer by baktum2
The easiest solution, would be if the other person, would simply buy your portion of the equity. If she is unable or unwilling, it is possible to sell your portion to someone else – but finding a buyer depends on a several factors.

Is there a mortgage on the house? One reason an investor may purchase a “portion” of the home is for the right to claim the interest income tax deduction.

Are you in a high appreciating market? An investor may consider buying a share IF the other partial owner agrees in writing to place the home for sale in X number of years or if the appraised price reaches $ ABC.

Will renters/boarders be allowed? An investor may consider the property for monthly cash flow.

As for the discount – like everything in real estate it’s negotiable. There may be a huge one, or none at all. You have to remember that equity is a floating figure. It has nothing to do with what you already paid or invested in the house. It depends soley on market conditions and what people are willing to pay today.

Assuming you find a buyer, one way to achieve the sale is by establishing a land trust. It will cost about $ 2- $ 4k to set up and there are ongoing annual maintance fees. It’s negotiable if you or the “buyer” pays them. With a land trust you are not actually selling the property, you are selling your “benefical interest” in the property.

What does that mean? It’s a bit complicated to explain in this little box.
Here is one company that does land trusts. Check out their website for details.