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Capital Stack Builder

Unless you're paying all cash, a real estate deal is funded by a stack of capital sources, each with its own claim on the property and its own level of risk. This builder lays that stack out: enter the total project cost and the amount coming from each source — senior debt, mezzanine or other junior debt, a seller carry, preferred equity, and common equity — and it shows the stack visually, the share each layer represents, your loan-to-value and loan-to-cost, the blended cost of capital, the equity you'll need to bring, and whether your sources cover the deal. Set any source to zero to leave it out.

Purchase price plus rehab, closing, and reserves.

Defaults to project cost if left blank.

Enter each source's amount and its annual cost — interest rate for debt, target return for equity. Costs are pre-filled; adjust as needed.

%
Amount ($)interest rate
%
Amount ($)interest rate
%
Amount ($)interest rate
%
Amount ($)pref return
%
Amount ($)target return

Set any source to 0 to leave it out of the stack.

Results
Sources balance the total project cost.
Total sources
$1,000,000
Total project cost
$1,000,000
Common / sponsor equity25.0%
Seller carry10.0%
Senior debt65.0%
Common / sponsor equityequity
$250,00025.0%
Seller carrydebt
$100,00010.0%
Senior debtdebt
$650,00065.0%
Blended cost of capital
8.8%
Weighted-average annual cost across every source in the stack.
Total debt
$750,000
75.0% of stack
Equity required
$250,000
25.0% of cost
LTV
65.0%
senior ÷ value
LTC
75.0%
total debt ÷ cost

See how the profits split — full Capital Stack & Waterfall

This free builder shows how a deal is capitalized. GoFlexi's paid Capital Stack tool adds the equity waterfall on top — exactly what each capital source earns once the deal exits.

Full equity waterfall
Return of capital, preferred return, GP promote, and IRR-hurdle tiers
Returns by tranche
IRR and equity multiple for every source — LP, GP, preferred, and debt
Preferred equity + LP/GP splits
Model a money partner and a sponsor promote on the same deal
Send deals from the calculator
Push a seller-finance structure straight into the stack
Save & revisit scenarios
Keep your deals and compare structures over time
One-page PDF export
Share the stack, waterfall, and returns with partners

Plus the full GoFlexi suite — the seller-finance calculator, Instant Mode, Compare, note tools, and more.

About This Capital Stack Builder

The capital stack is the layered set of financing sources that fund a real estate purchase or project, ordered by who gets paid first and who bears the most risk. At the bottom sits senior debt — the first-position mortgage, lowest cost and lowest risk because it's repaid before anything else and is secured by the property. Above it come junior layers: mezzanine or other subordinate debt, then a seller carry (a note the seller holds, usually in second position behind the senior loan), then preferred equity, each accepting more risk for a higher return because it's paid only after the layers below. At the very top is common equity — the sponsor's and investors' money, paid last, but entitled to all the upside once everyone below is satisfied. The order is the whole point: in good times the upper layers earn the most, and in bad times they're the first to be wiped out.

This builder turns those amounts into the numbers lenders and partners actually look at. It totals your debt and your equity, shows each tranche as a share of the whole stack, and computes two different leverage measures that are easy to confuse. Loan-to-value (LTV) compares the senior loan to the property's value — it's what a first-position lender cares about. Loan-to-cost (LTC) compares all of your debt to the total project cost — it's how much of the deal is funded by borrowed money rather than equity. A deal can look conservative on LTV while carrying a lot of total leverage once a seller carry and mezzanine are stacked on top, which is exactly the kind of thing this view surfaces. It also blends the cost of every source — each loan's rate and each equity layer's target return — into one weighted cost of capital, so you can judge what the whole stack costs, not just any single piece.

The builder also checks the most basic question a stack has to answer: do your sources add up to your uses? The total of every capital source must equal the total project cost — purchase price plus rehab, closing, and reserves. If they don't, you either have a gap to fill or more capital than the deal needs. The builder flags that balance and tells you the equity you'll have to bring to close. This free version maps the structure, your leverage, and your blended cost of capital; when you're ready to model the returns each layer earns — preferred returns, sponsor promote, and the equity waterfall that splits the profit — that's where GoFlexi's paid tools pick up. And because a seller carry is a note like any other, you can size its payment and amortization with GoFlexi's free mortgage calculator on the way.

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Frequently Asked Questions

What is a capital stack in real estate?

The capital stack is the collection of capital sources used to fund a deal, arranged by priority of repayment and risk. From the bottom up it typically runs senior debt, junior or mezzanine debt, a seller carry, preferred equity, and common equity. Lower layers are repaid first and carry less risk and lower returns; higher layers are paid last, carry more risk, and earn higher returns plus the upside. Understanding where each dollar sits tells you who gets paid in what order if the deal goes well — or badly.

What order do the layers get paid?

From the bottom of the stack to the top. Senior debt is paid first because it holds the first lien on the property. Next come any junior or mezzanine loans, then a seller-held note, then preferred equity, which gets its return before common equity sees anything. Common equity — the sponsor and investors — is paid last but keeps all the remaining profit. The same order runs in reverse for losses: common equity absorbs the first hit, and senior debt is the last to be impaired.

What's the difference between senior debt, mezzanine, preferred equity, and common equity?

They're rungs on the risk ladder. Senior debt is the first mortgage — secured, cheapest, repaid first. Mezzanine (or other junior) debt sits behind it, often unsecured or secured by a pledge of ownership interests, at a higher rate. Preferred equity is an ownership position that gets a fixed, priority return before common equity but ranks below all debt. Common equity is the sponsor's and investors' capital — last to be paid, first to absorb losses, and the holder of all the upside. Each step up the stack trades more risk for a higher expected return.

What's the difference between LTV and LTC?

Loan-to-value (LTV) is the senior loan divided by the property's appraised value or price — it's the ratio a first-position lender uses to size and price the loan. Loan-to-cost (LTC) is your total debt divided by the total project cost (purchase plus rehab, closing, and reserves) — it measures how much of the whole deal is funded by debt versus equity. A deal can show a modest LTV but a high LTC once a seller carry and mezzanine debt are stacked on, so it's worth watching both. This builder shows each one.

What is the blended cost of capital?

It's the weighted-average annual cost of all the money in your stack — each source's rate or target return, weighted by how much of the stack it makes up. A loan's cost is its interest rate; an equity layer's cost is the return it expects to earn. Cheaper senior debt pulls the blend down, while pricier mezzanine, preferred, and common equity pull it up. The builder pre-fills a typical cost for each layer that you can adjust, so it shows a blended cost the moment you enter your sources. Comparing that blended cost to the property's cap rate or expected return tells you whether the deal earns more than its capital costs.

Where does seller financing fit in the capital stack?

A seller carry, or seller second, is a note the seller holds for part of the price, so it sits in the debt portion of the stack — usually behind the senior mortgage but ahead of all equity. It's one of the most flexible layers in creative finance: it can shrink the equity you need, bridge the gap between the senior loan and the price, and be structured on terms you negotiate directly with the seller. In this builder it's a first-class source; size its payment and amortization with GoFlexi's free mortgage calculator.

What are 'sources and uses'?

It's the basic accounting of a deal: 'uses' is everything the money goes toward — purchase price, rehab, closing costs, and reserves — and 'sources' is everywhere the money comes from — each loan and each slice of equity. The two sides must equal. If your sources fall short of your uses, you have a funding gap to close; if they exceed it, you've raised more than the deal needs. This builder totals your sources and compares them to the project cost so you can see the balance immediately.

What do the percentages in the stack represent?

Each layer's percentage is its share of your total capital sources — the stack itself — not of the property's value or cost. The bands always add up to 100% of what you've raised. If your sources come to more than the project cost (an over-raise), the percentages still describe how that capital is split between the layers; the sources-versus-uses check above the stack is what flags the over- or under-funding.

How much equity do I need for a deal?

Your equity is whatever portion of the total project cost your debt doesn't cover. Once you set the senior loan, any junior debt, and a seller carry, the remaining amount must come from equity — preferred, common, or both. This builder adds up your debt, subtracts it from the total cost, and shows the equity required and what share of the stack it represents. Lowering the equity check usually means adding leverage — a larger senior loan, a seller carry, or mezzanine — each of which raises your loan-to-cost and your risk.

Why does the stack have to equal the total project cost?

Because every dollar the deal spends has to be funded by some source of capital. The sum of senior debt, junior debt, seller carry, preferred equity, and common equity has to match the total of the purchase price and all project costs — otherwise the deal can't close as drawn. That's why the builder treats balancing sources against uses as the first test: a stack that doesn't add up isn't a financing plan yet, it's a gap to solve. Adjust a loan amount or an equity contribution until the two sides meet.

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