I’m not an investor, but I have a question for investors. I was looking at HEA’s through some companies that supposedly specialize in them, and the fees around repayment were almost equal to the equity received. I’m shocked because it doesn’t seem to make sense.

Here’s an example of how I thought this would work: (the numbers are round to make the math easy.)

My house is worth 500K, and I want to make home improvements.

I sell a 20% stake to an individual investor. I primarily use that money to make home improvements. I have no date by which I must sell the house, but when I do the investor receives 20% of the purchase price. Why can’t it be that easy?