How to determine current value of investment

Several members of our family bought a house as an investment for my aging mother.

  • One person made the downpayment of $50K
  • All contributed various amounts towards the mortgage, maintenance, taxes etc.
  • Some contributed far more than others we have good records.
  • Total mortgage/taxes is $280K
  • The house has appreciated from $300K to $600K
  • Is there a formula/spreadsheet to determine how much each person should get upon sale of the house.

It’s good that you kept detailed records of your contributions, that will make the analysis much easier. Have your family members decided how they wish to determine each person’s share? For instance you could simply add up each person’s contributions and divide by the total of all contributions to get a per person percentage. Unfortunately this would ignore the timing of each contribution, that is the person making the $50k downpayment has likely had the greatest impact on the transaction because they put in a large sum early in the deal.

I would suggest calculating the present value of each person’s contributions to determine the percentages attributable to each. This percentage can then be applied to the estimated value of the property to allocate ownership interest. I would also suggest you and your family members put your decided method of allocation in writing so there are no misunderstanding later on. If you would like help setting up the spreadsheet send me a PM.