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Understanding the Capital Stack in Real Estate Investing

The capital stack is an important concept for evaluating risk and assessing investment opportunities.


[Updated: Sep 14, 2021 ] Oct 29, 2019 by Matt Frankel, CFP

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Type of Capital Amount Percentage
Equity (down payment) $150,000 30%
Debt (mortgage) $350,000 70%
Total $500,000 100%
Charles Clinton describes the capital stack and how this affects investors on the Millionacres Podcast
 
Capital Type Amount % of Total
Common equity $1,000,000 20%
Preferred equity $500,000 10%
Mezzanine debt $1,000,000 20%
Senior debt $2,500,000 50%
Total $5,000,000 100%
Capital Stack

Click to enlarge

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