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Episode 10

THE CAPITAL STACK IN REAL ESTATE: WHAT INVESTORS NEED TO KNOW

How can investors use the capital stack to balance risk and maximize returns?

What you’ll learn in this episode:

Rich, Jason, and James unpack one of the most important concepts in real estate and private equity investing—the capital stack. They explain how each layer, from senior debt to common equity, represents a balance of risk, reward, and priority in getting paid. Through real-world examples, they reveal how mastering the capital stack empowers investors like you to evaluate deals and ask smarter questions.

 

LISTEN TO THE EPISODE HERE
20:44

Episode Highlights

(00:31) What the capital stack is and how it can structure real estate and private equity transactions.

(01:20) How each layer—from senior debt to common equity—carries different levels of risk and reward.

(03:11) How mezzanine debt and preferred equity add flexibility to deals.

(04:11) Why collaboration and creativity in filling the capital stack make large projects possible.

(05:30) Examples that compare a simple home purchase to a $100 million development project.

(08:28) How private equity transactions mirror real estate structures. 

(10:01) Why understanding the capital stack helps investors gauge risk, timing, and payout structure.

(15:42) How sponsors manage partner relationships in layered financing structures.

 

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About The Epic Investor

The Epic Investor” podcast will help you learn how to use private equity and real estate investing as tools for financial freedom and a more fulfilling life. We’ll guide you towards building passive income and making smarter investment decisions. In each episode, we’ll break down complex investment concepts into clear, actionable insights to give you freedom of purpose.