Real Estate Acquisition Strategy
The Stack
Method.

How to close deals zero out of pocket — and understand the two down payments that make it work.

Submit Your Deal Download Calculator
Overview
What Is the Stack Method?

The Core Idea

Stack two sources of capital — a DSCR lender and a transactional lender — to cover 100% of the purchase price. Zero cash out of pocket at closing.

Who It's For

Sellers who want a large cash down payment at close — while you, the buyer, structure the deal so seller financing covers the gap.

1st Position

Primary DSCR Lender

Funds the majority — typically 70% LTV. First in line.

2nd Position

Seller Carryback

Seller holds a note for remaining equity. No cash from you.

Same-Day

Transactional Lender

Bridges the down payment gap. Funds in — comes right back out.

Multifamily building
Key Concept
Two Down Payments

This is where most people get stuck — and why deals fall apart.

Down Payment #1
To the Seller
Cash the seller receives at closing

Negotiated during your offer. You agree on a dollar amount — e.g. 60% of purchase price. This is your negotiation lever with the seller.

Down Payment #2
To the DSCR Lender
Equity the lender requires to fund

Typically 30% of purchase price. Covered by your transactional lender — not your own cash. Flows in and comes right back out.

💡 These two down payments are calculated differently. One is negotiated with the seller. The other is the lender's required equity coverage. Same deal — two different math problems. Confusing them is what causes deals to fall apart.

Step 1 — Negotiation
Deal Structure: The Offer
Purchase Price
$1,000,000
$600KCash Down · 60%
$400KCarry · 40%
Cash Down to Seller $600,000
Seller Carryback Note $400,000
Step A

Agree on the cash down split

Negotiate the % the seller wants in cash vs. how much they'll carry as a note. Higher cash down = easier seller buy-in.

Note

This is Down Payment #1

These numbers appear on the purchase contract — the commitment made before any actual funding happens.

Multifamily building
Step 2 — Funding
Funding the Deal
Escrow — The Pot of Gold
$1,000,000
🏦
DSCR LENDER — 1ST POSITION
$700,000
70% LTV
⚡
TRANSACTIONAL LENDER — DOWN PMT #2
$300,000
30%
$700K + $300K = $1,000,000 fully funded

The transactional lender's $300K flows in and out same day. It satisfies the DSCR lender's equity requirement — then is repaid immediately when the seller carryback funds at closing.

Multifamily building
Step 3 — Closing
Disbursement from Escrow
Escrow Balance
$1,000,000
↑
→ Seller receives cash — DP #1 fulfilled
−$600,000
Remaining: $400,000
📄
→ Seller receives note (not cash)
$400K Note
Mortgage note + deed of trust recorded
↩
→ Transactional lender repaid — DP #2 returned
−$300,000
Remaining: $100,000
💰
→ Remainder to buyer
$100,000
Closing costs, fees, renovation, or profit

The Seller Carryback Note

The $400K carryback is a mortgage note — not cash. The seller takes home the deed of trust, a structured repayment agreement recorded at title.

The $100K Remainder

After seller ($600K) and transactional lender ($300K) are paid, $100K remains:

→Closing costs & title fees
→Renovation budget
→Cash in your pocket
The Result
Zero Out of Pocket
StructureAmountSplitSource
Cash to Seller$600K60%Negotiated
Seller Note$400K40%Seller carry
DSCR Lender$700K70%1st position
Trans. Lender$300K30%DP #2
Net to Buyer$100K—After disbursements

DP #1 — Cash to seller ($600K). Your deal negotiation. Funded from DSCR proceeds flowing through escrow.

DP #2 — Equity to DSCR lender ($300K). Funded by transactional lender. Returned at closing same day.

Your Cash In
$0
out of pocket at closing

Ready to run your own numbers? Download the free calculator or submit your deal directly to Shipp Apex.

Interactive Tool
Your Deal Calculator

Enter Your Deal Numbers

$
10%$600,00095%
50%$700,00085%
You're in the green. DSCR LTV (70%) exceeds seller cash down (60%). Difference is yours after fees.
DSCR Funds
$700K
Trans. Lender
$300K
Cash to Seller
$600K
Seller Note
$400K
Cash to You at Closing
$100K
Zero out of pocket — yours after fees.
$700K DSCR + $300K Trans. = $1M in escrow