Capital Stack

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Capital Stack is the total capital invested. In a multifamily real estate deal, the most common capital stack consists of the loan, often referred to as Senior Debt, followed by Class A and B shares. The capital stack components sitting at the bottom get paid first. In this case, the loan is followed by Class A and finally Class B shares. At the bottom, the components present lower risk and lower return; conversely, the components at the top present higher risk and higher return.

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