StackDesk

One file · three seats · same numbers

The triangle.

The buyer borrows from an institutional first and from the seller on a recorded purchase-money second. The lender is paid first in life and in foreclosure. The seller is paid next. The kicker dies if the first forecloses.

Live file · rev 1

$500,000 · first $350,000 · second $150,000 · check $14,650

  • AFR floor met
  • AFR not locked
  • Below usury cap
  • CLTV 100% over cap
  • Senior DSCR
  • Investment occupancy
  • Zero down · check still due
Edit on the deskTriangleSourceEmail

Constitution · rev 1 · not ready

$500,000 · 70% / 30% · investment / non-owner-occupied · AFR 4.49% unlocked · September 2026

BuyerIdleSellerIdleLenderIdle

This structure does not close as drawn

  • CLTV 100.0% sits over this senior’s 80% cap. A 70/30 stack is 100% CLTV — most DSCR firsts will not close it as disclosed subordinate financing.

Raising the cap is only honest if a named senior actually publishes that CLTV. Most DSCR firsts do not.

Conflict engine

  • Conflict

    CLTV 100% over the 80% senior cap

    A $0-down stack is 100% CLTV no matter how you split 70/30 vs 65/35. Cash down is the only number that moves CLTV. Lowering the first just resizes the second.

    Lowering Note #1 LTV to 65% resizes the second to $175,000 — CLTV stays 100% at zero down. Cash down is the CLTV lever.

  • Conflict

    Kicker characterization is unset

    Counsel decides additional interest vs participation. The desk will not pick it for them.

  • Conflict

    No third-party servicer on the file

    Kitchen-table collections are how files blow up. Name a licensed servicer or leave it TBD — required, not optional.

  • Conflict

    No licensed escrow holder named

    Purchase money sits with a licensed title company or a Florida attorney trust — not SSDF Inc., not StackDesk, not Stripe. Name the table that will record deed → mtg 1 → PMM 2.

  • Conflict

    ICA is not marked before the deed records

    Intercreditor is a closing condition, not a follow-up. It circulates before the warranty deed records.

Rebalance

Residual second = price − cash down − Note #1. Moving LTV does not move CLTV at zero down. Aligned seats go Drifted.

This file
N1 $350,000 · N2 $150,000 · $561.25/mo
At 65% first
N2 $175,000 · CLTV still 100% at $0 down
Seats that will drift
Seller and lender (buyer is the desk).
buyersellerlender

seller packet · rev 1 · one file, three seats · identical locked appendix

Never “bank-approved.” Never a 0% note. Never “just take it back.”

Note #1
$350,000
8.50% · $2,691.20/mo
Note #2
$150,000
4.49% AFR · $561.25/mo
Cash down
$0
Check $14,650
CLTV
100%
Cap 80%

Buyer financing — not an approval

$350,000

First-position loan sought at 70% LTV, $2,691.20/mo. A professional first is being shopped. This pane will never say "bank-approved."

Your second: $150,000 at 4.49%, $561.25/mo. If the senior forecloses, this second can be wiped and the kicker dies — the kicker is $0.

One page for the seller · not a contract

What carrying paper actually means

For you, on the property. You are not discounting the price. You are selling $500,000 and taking $150,000 of that as a recorded second mortgage, with a professional first-position lender wiring $350,000 at closing. Cash down is $0; the buyer’s check at closing is still about $14,650 (stamps, title, points, escrows). Zero down is not a zero check.

What you collect

  • At closing: $350,000 from the first-position lender toward your price.
  • Every month: $561.25 at 4.49%, at or above the IRS applicable federal rate.
  • At year 5, or on sale / cash-out refinance: the $150,000 balloon, plus the kicker if the property has cleared a $550,000 hurdle.
  • Illustrated kicker at a $650,000 sale: $17,400.

How you are protected

  • Warranty deed to the buyer; you hold a recorded Purchase Money Mortgage — the same instrument a bank uses.
  • A first lender already underwrote the file. Your second sits behind that underwriting, not a handshake.
  • Owner's and lender's title insurance. Tax and insurance escrow so a tax certificate cannot jump in front of you.
  • Licensed third-party servicing. You get a 1099-INT and a payment history. You do not chase checks.
  • Personal guaranty from the individual behind the buyer entity.

The tax reason this exists

A cash sale means the entire gain hits this year's return. An installment sale under IRC §453 lets you recognize gain as you actually receive principal, and you earn interest on money that would otherwise go to the IRS. Your CPA still confirms: basis and gross-profit percentage (Form 6252), §1250 recapture in the year of sale (that piece cannot be deferred), the AFR floor on the note, and how the kicker is reported.

If you list it

$404,840

Illustrative net after commission and tax this year

If you carry it

$551,075

Cash now + note + interest + illustrated kicker

The honest trade-off

Florida is a judicial foreclosure state. There is no "just take it back." A contested action can run 12–36 months. If the first lender forecloses, your second can be extinguished and the kicker does not survive. That is why the coverage math, the escrow, and the first lender's underwriting are the real protection — not speed.

How you hear about a problem

You hear it from the servicer, not a lis pendens. Notice and a right to cure are bargained days — left blank until counsel fills them. If the first lender starts a foreclosure, your second can be wiped and the kicker dies.

  • Late Note #1 — servicer notifies you at the bargained day count.
  • Casualty / tax — loss payee and escrow sit with the first, you second.
  • Balloon 90 / 60 / 30 — servicer calendar, language in the note.
  • Senior foreclosure start — you hear it from the servicer. Kicker dies.

Not a contract. Not a loan commitment. Not legal or tax advice. A one-page read your attorney and CPA look at before anyone drafts a note.

Tax year — planning illustration

CPA confirms. Not a filing. Pub 537 / Form 6252.

ItemCash saleInstallment / carry
Year-0 cash to seller$500,000$350,000
Gross profit$320,000$320,000 · GP 64.0%
§1250 recapture (year of sale)$0$0
Year-0 recognized (illust.)$320,000$224,000
Illust. year-0 tax$60,160$42,112
Deferred gain$0$96,000
Interest (ordinary, each year)$0$6,735 / yr

Note #1 proceeds are cash in year 0 — they are not deferred just because there is a second. Recapture is recognized in the year of sale even on a carry. If the seller later sells or gifts the note, installment treatment can accelerate. Servicer issues 1099-INT; 1099-S may issue at closing. §453A not flagged (deferred face under $5M on this sheet). IRS Pub 537: https://www.irs.gov/publications/p537 — Form 6252: https://www.irs.gov/forms-pubs/about-form-6252

How you hear about a problem

Notice and a right to cure are bargained days, not a fake statute. Leave them blank until counsel fills them.

  • Late Note #1. Servicer notifies seller at the bargained day count — not a lis pendens.
  • Late Note #2. Servicer notifies buyer and copies seller's counsel.
  • Casualty / insurance. Loss payee order: lender first, seller second.
  • Tax certificate. Escrow with the first so a tax lien cannot prime the second.
  • Sale / refinance / transfer. Both notes. Due-on-sale on Note #2. New waterfall, not a silent extension.
  • Balloon 90 / 60 / 30. Servicer calendar. Language in the note, not a hallway.
  • Senior foreclosure start. Seller hears it from the servicer. Kicker dies. Second can be wiped.

Independent counsel

Buyer’s Florida attorney drafts. Yours reviews. Two lawyers, not one. Florida Bar referral.

Mailto — request a change

Locked appendix · identical on every packet · rev 1

Purchase price
$500,000
Cash down / cash-to-close
$0 / $14,650
Note #1
$350,000 · 8.50% · $2,691.20/mo
Note #2
$150,000 · 4.49% · $561.25/mo
LTV / CLTV
70% / 100% vs cap 80%
Occupancy
investment / non-owner-occupied
AFR
4.49% mid-term AFR · unlocked
Close mode
true-carry
Simultaneous close
same table, same day
Servicer
TBD — third-party required
Escrow holder
TBD — licensed title or Florida attorney trust
Recording order
deed → mtg 1 → PMM 2 → ICA
ICA before deed
not marked
Kicker
Option A · 20% above $550,000 · dies on senior FC

Clock one · same day, same table

True carry at the table

Title and the senior accept a recorded PMM in lieu of cash for Note #2. Seller walks with Note #1 proceeds. Buyer writes stamps, title, points, and escrow on top.

  1. 01Lender wires Note #1 $350,000 to escrow → seller.
  2. 02Seller deeds the property to the buyer.
  3. 03Buyer executes Note #1 + Mortgage #1 to the lender.
  4. 04Buyer executes Note #2 + PMM #2 to the seller ($150,000).
  5. 05Buyer writes the check at closing: $14,650 (down + stamps + title + points + escrow).

Split close dates are a hard stop. Recording order is deed → mtg 1 → PMM 2 → ICA / kicker memo. Table: TBD — licensed title or Florida attorney trust. Funds are held and disbursed by TBD — licensed title or Florida attorney trust, not by SSDF Inc. or StackDesk. Cash-to-close is the check the buyer brings to that table. Stripe is not a Florida escrow agent.

Clock two · every month

Preferred: one third-party servicer if the first allows it. Default: two pipes + cross-default notice. Buyer does not pay the seller in Venmo.

  • Gross NOI (stated)$4,000
  • Vacancy / mgmt / capex haircut-$0
  • Tax + insurance-$0
  • Note #1 P&I−$2,691.20
  • Note #2 IO−$561.25
  • Buyer cash flow (illust.)$747.55

Clock three · sale or refi

  1. 01 · Costs off the top.
  2. 02 · Note #1 payoff (plus any prepay) — remaining $334,216 at balloon.
  3. 03 · Note #2 payoff $150,000.
  4. 04 · Kicker only if the hurdle cleared and the senior did not foreclose. On senior FC the kicker is $0.
  5. 05 · Buyer residual $119,600 on the illustrated sale.

A leftover second after refi is a new triangle, not a silent extension.

Intercreditor — counsel checklist, not an executed ICA

  1. 01Junior: Note #2 is expressly subordinated. No wrap, no AIC, no subject-to.
  2. 02Recording order: deed → mtg 1 → PMM 2 → ICA / kicker memo. Not negotiable on this desk.
  3. 03No CLTV sneak: cash down is the only CLTV lever. Resizing the first just resizes the second.
  4. 04Senior-default notice: days bargained, not a fake statute.
  5. 05Seller right to cure and add the advance to Note #2: days bargained.
  6. 06Standstill as the lender form requires — not a 90-day seller veto of the first.
  7. 07Insurance and tax with the first; loss-payee order lender then seller.
  8. 08Kicker dies on senior foreclosure. Recovery is Note #2 principal + accrued interest.
  9. 09Notice addresses = servicer + both counsel. Not a Gmail. Not a kitchen table.
  10. 10ICA before the warranty deed records.

After close — static card, not a loan OS

Balances at origination
N1 $350,000 · N2 $150,000
AFR lock
Not locked
Kicker hurdle
Option A · 20% above $550,000
Balloon
$150,000 in 5 years
Servicer
TBD — third-party required
Escrow holder
TBD — licensed title or Florida attorney trust — not SSDF Inc., not Stripe