James, a prospective homebuyer, finds his dream house with a price tag of $1,000,000 in Austin, Texas. Given the size of the mortgage, the lenders require at least a 700 or higher FICO score and a $200,000 down payment. With $300,000 worth of savings in liquid market securities and a $250,000 pre-tax income, James can afford the required down payment and service the mortgage expenses. Rather than investing two-thirds of his savings (which would compromise his liquidity, portfolio diversification and likely would trigger a taxable gain), James partners will tillo to finance 50% of the down payment in exchange for 35% of the property’s future appreciation (or depreciation). The buyer is responsible for funding the remaining 50% of the down payment as well as all closing expenses.