Veteran Innovative LendingThe deal
Change anything. It recalculates as you type.
Debt coverage check
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This is an estimate, not a quote. It prices the structure. It does not approve anything.
And it cannot answer the question that actually decides these deals: whether your first-position lender permits subordinate financing at all. Many DSCR lenders do not allow a second behind them, and where that is true the structure is dead at any price. Ask them before you get attached to the numbers.
No lender yet? Start an application with our mortgage partner, a separate company from us, then put that question to them first.
How this is calculated
No black box. Here is every step, so you can check it against your own spreadsheet.
The cash to close
DSCR loan = purchase price × LTV. Your first-position lender funds that much, and down payment = purchase price − DSCR loan is the gap the Stack Method fills.
Add closing costs = purchase price × your closing cost rate, then our return, which is 2.5% × (down payment + closing costs) with a $2,500 minimum. Two optional items can sit on top: $1,400 on Tier 2, where our transaction coordinator runs the contracts and lending logistics, and 1% of the purchase price for proof of funds on deals over $1M. Deals that size also need a pre-approval conversation rather than just a submission. Those three added to the down payment and closing costs are your total cost to close.
Whether you bring money
The seller can only carry against equity they actually have, so the carry is capped at purchase price − what they still owe. If that cap is at least your total cost to close, you close at nothing out of pocket and take the excess back at closing. If it is short, the shortfall is what you bring.
The coverage check
Both payments are amortized over 30 years at the rates you set. The ratio is monthly rent ÷ (loan payment + seller carry payment + taxes + insurance + management).
Two things people get wrong here. The seller carry payment counts. It sits in the stack with everything else, which is why a deal can clear the cash-to-close test and still fail at the lender. And the 10% management line is our own underwriting rule, not a lender requirement — we apply it whether or not you plan to self-manage, because a deal that only works when the owner works it for free is not cash flowing. Set it to zero if you want to see it your way.
Most DSCR lenders want to see 1.25x or better, but that threshold is theirs and it varies. Ask yours.