By definition -
An equity partner is a partner in a partnership who is a part owner of the business, and is entitled to a proportion of the distributable profits of the partnership. The term is used in contra-distinction to a salaried partner (or contract partner) who are paid a salary, but do not have any underlying ownership interest in the business and will not share in the distributions of the partnership (although it is quite common for salaried partners to receive a bonus based upon the firm's profitability).
Although they are both regarded as partners, in legal and economic terms, equity partners and salaried partners have little in common other than joint and several liability. The degree of control which each type of partner exerts over the partnership depends upon the relevant partnership agreement.
The division between equity and salaried partners could, in theory, occur in any partnership, but in practice, the distinction is most frequently referred to in law firms and accountancy firms.
 Type of equity partnership
In their most basic form, equity partners enjoy a fixed share of the partnership (usually, but not always an equal share with the other partners).
However, in more sophisticated partnerships, different models exist for determining either ownership or profit distribution (or both).
Probably the most common two forms are "lockstep" and "eat-what-you-kill" (sometimes referred to, less graphically, as "source of origination").
Lockstep involves new partners joining the partnership with a certain number of "points". As time passes, they accrue additional points, until they reach a set maximum. The length of time it takes to reach the maximum is often used to described the firm (so, for example, one could say that one firm has a "seven year lockstep" and another has a "ten year lockstep" depending upon the length of time it takes to reach maximum equity).
NOW - How can this benefit you?
Everyday I read post on here form people looking to investors or looking for money. You can benefit from this by constructing a sound business plan on the property you are trying to buy and presenting it to others that HAVE MONEY but may not want to actively work in real estate. Lets say you have a property that 200K. You need to mae repairs on it but you can do them yourself. You dont have the money to buy so you look for people who do. It may noy be just one person, so you devide the property cost up. So look for 10 investors wit 20K each to drop into the deal - you form a partnership and you lay out the guidelines. Its just like a compan with stockholders. They dont have control but they collect their dividend check. You now have your property, you have not spent one dime of your own money and you have control. SO WHAT IS MY EQUITY IN THIS DEAL THEN? Well its sweat equity. You did not have the money for your portion so you contribute time, managemnt, labor, marketing, etc.....come on guys, think a little different.
Lets get back to what made this site great - lets see those creative juices flowing. NOW - what I dont want to see is a bunch of post on here asking well how do I get started, where do I find, partners, the truth of the matter is that this will work! Its done everyday and this post is only meant as a catlyst to get you to thinking. If you have relavant questions, please ask, but otherwise, use what I have put here and RESEARCH IT!....find out if this is something that will work for you. I have done it and it was just the thing I needed to achieve what I was working toward so dont be afraid and "JUST DO IT".
Also there are other post in here regarding equity partnerships so do a search for them and check them out.
Good luck and Much Success!
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