When you’re working deals in residential, multi-family, or commercial real estate, having a reliable transactional lender can make or break your success. That’s why the stack method in transactional lending is a game-changer for wholesalers. This method provides the speed, scalability, and reliability you need to close deals—whether it’s your first deal or your hundredth.
At Oakstone Lending, we specialize in providing fast, reliable funding for Earnest Money Deposits (EMD), stack lending, and double closings. With over 150 deals funded and capital ready for everything from $1,000 EMDs to multi-million-dollar commercial deals, we’re here to ensure your next deal is a success.
What Is the Stack Method?
At its core, the stack method in transactional lending involves a series of interconnected transactions. It typically includes three key players:
- The Seller (A): The original owner of the asset, often motivated to sell quickly.
- The Wholesaler/Intermediary (B): An investor who identifies a profitable asset and secures a buyer (C) before purchasing the asset from the seller (A).
- The End Buyer (C): The final purchaser of the asset, who has the financial capacity and intent to acquire the asset from the intermediary (B).
The process unfolds as follows:
- The wholesaler (B) identifies a suitable asset from the seller (A) and secures a committed buyer (C).
- The transactional lender provides a short-term loan to the wholesaler (B) to purchase the asset from the seller (A).
- Upon closing the transaction with the seller (A), the wholesaler (B) immediately sells the asset to the end buyer (C).
- The wholesaler (B) uses the proceeds from the sale to repay the transactional lender.
This method allows wholesalers to execute deals swiftly without tying up their own capital, minimizing their financial risk and maximizing potential returns.
This method relies on speed and certainty, and that’s where Oakstone Lending’s streamlined processes shine.
Why Wholesalers Choose the Stack Method
- No Capital Tied Up: You don’t need to front the purchase price.
- High ROI Potential: By leveraging someone else’s capital, your return on investment increases dramatically.
- Minimized Risk: Secure your buyer first, and the deal is nearly risk-free.
For wholesalers, especially in competitive markets, speed and reliability are everything. That’s why working with a lender like Oakstone Lending is crucial. Our automated funding processes ensure your deal closes fast without hiccups.
Detailed Examples: Residential, Multi-Family, and Commercial Deals
Residential Deal Example: $200,000 Single-Family Property
- EMD Needed: $5,000
- Oakstone Lending Fees:
- EMD Return: $2,000 minimum or 40% ($2,000 applies here)
- Total Paid Back After Closing: $7,000
- Profit Calculation:
- Purchase Price: $200,000
- End Buyer Price: $215,000
- Profit (after fees): $15,000 – $2,000 = $13,000
- ROI for You: 160% (Profit / EMD Paid)
Multi-Family Deal Example: $2,000,000 10-Unit Apartment Complex
- Transactional Loan Needed: $2,000,000
- Oakstone Lending Fees:
- Double Closing Fee: 1.5% ($30,000)
- Total Payback: $2,030,000
- Profit Calculation:
- Purchase Price: $2,000,000
- End Buyer Price: $2,150,000
- Profit (after fees): $120,000
- ROI for You: 400% (Profit / Your Capital at Risk)
Commercial Deal Example: $10,000,000 Office Building
- Transactional Loan Needed: $10,000,000
- Oakstone Lending Fees:
- Double Closing Fee: 1.5% ($150,000)
- Total Payback: $10,150,000
- Profit Calculation:
- Purchase Price: $10,000,000
- End Buyer Price: $10,500,000
- Profit (after fees): $350,000
- ROI for You: 233% (Profit / Your Capital at Risk)
How Oakstone Lending Streamlines the Process
- Fast Approvals: Our automated processes ensure funding approval in hours, not days.
- Flexible Funding: We fund deals from $1,000 EMD to multi-million-dollar transactions.
- Dedicated Support: Our transaction coordinators handle the details, so you focus on closing deals.
Wholesalers across the U.S. trust Oakstone Lending because we’re not just a lender—we’re a partner in your success. From ensuring your earnest money deposit funding to providing capital for double closings, we’ve got you covered.
What a Reliable Lender Means for Wholesalers
Imagine this: You find a deal but need $5,000 for EMD. Without a lender, you could lose the opportunity to another investor with quicker funding. That’s where we step in. With Oakstone Lending, your deals don’t just happen—they thrive.
Here’s what partnering with us looks like:
- Faster Closing: Secure properties before competitors can act.
- Credibility: Sellers and buyers see you as a serious player.
- Scalability: Fund more deals simultaneously without using your capital.
Benefits and Drawbacks of the Stack Method
Transactional lending offers several advantages, particularly for real estate wholesalers:
- 100% Financing: Lenders often provide loans covering the entire purchase price, given the presence of a committed buyer.
- No Credit Checks: These loans primarily rely on the asset’s value and the end buyer’s financial capacity, eliminating the need for credit checks on the wholesaler.
- Speed and Efficiency: The streamlined process enables rapid deal execution, minimizing holding costs and maximizing profitability.
- Reduced Risk: By securing a buyer upfront, wholesalers mitigate the risk of holding onto an asset for an extended period.
However, some drawbacks need consideration:
- High Costs: Transactional lenders often charge higher fees due to the short-term nature of the loan.
- Dependence on the End Buyer: If the end buyer fails to close, the wholesaler faces significant financial pressure.
- Potential for Increased Debt: Overreliance on transactional funding can lead to accumulating debt if not managed carefully.
Common Questions About Stack Lending
Q: How long does it take to get approved for funding?
A: Our automated processes allow for same-day approval in most cases. Just submit your deal online.
Q: Do I need perfect credit?
A: No! Transactional funding relies on the strength of the deal, not your credit score.
Ready to Fund Your Next Deal?
Whether it’s residential, multi-family, or commercial, Oakstone Lending is your partner for fast, reliable transactional funding. Don’t let capital hold you back from closing your next deal.
Submit your deal today at oakstonelending.com or email us at funding@oakstonelending.com.
