When calculating risk on a property investment, real estate investors have several tools they can use. One of the most useful resources is the “capital stack”. The term refers to the different financial sourcing layers that go into funding the purchase of a real estate project.
Real estate investing is generally considered a very stable income vehicle. But this actually hinges on the investor’s position within the capital stack. In this article, we’ll explain the capital stack and why all investors must learn its importance.