Funding Combinations Quiz

What is a Funding Stack? *

Same thing as a "fat stack of bennies" – slang for a pile of money

A visualization of the various types of funding used in a real estate deal that reflects risk.

The pile of credit cards handed to the server when all six of you are paying for your own meal.

The new "Silver Dollar" pancakes at the IHOP.

Why would we ever turn a funding stack on its side? *

To illustrate the funding obligations in a joint venture.

We don't do it on purpose. We took the picture with an iPhone and sometimes those pictures come in sideways.

To make the required funding amount look a little less intimidating.

You should only use funding combinations when you are out of your own money *

True

False

When proposing a percentage of the deal to an equity partner in second position, what is the ration of funding percentage to profit percentage you should consider? *

2-1

100-50

1-1

Which of the following has the lowest risk in a funding stack? *

Preferred Equity

Mezzanine Debt

Senior Debt

Debt repayment always comes before equity positions. “Senior” and “Junior” refer to what comes first or second. Senior Debt is first position. Remember first position is the lowest risk and normally gets the lowest return.

Show Me The Money: How to Fund Your Real Estate Deals

Funding Combinations Quiz