The Morby Method Explained: Gap Funding for the Modern Investor

"Infinite ROI isn't just a buzzword. When you use the Stack Method correctly, you're buying assets with zero of your own capital tied in the deal. That's true wealth building."

If you've spent any time in the creative finance community, you've heard of Pace Morby and the "Morby Method" (often referred to as the **Stack Method**). It's one of the most powerful strategies for acquiring rental properties with little to no money out of pocket.

But while the strategy sounds simple on a whiteboard, there is a common hurdle: **The Funding Gap.**

What is the Stack Method?

The Stack Method involves "stacking" two types of financing to cover 100% of the purchase price:

• DSCR Loan (70% - 80% LTV): You get a standard Debt Service Coverage Ratio loan from a hard money or private lender. They fund the majority of the acquisition.
• Seller Carryback (20% - 30%): The seller agrees to "carry" the remaining equity as a second mortgage. You pay them back over time with interest.

The result? You own 100% of the property, but the lenders have provided 100% of the cash. But here is the problem: **Most institutional lenders (the DSCR side) won't let the seller carry the full 30% if that money isn't liquid at the closing table.**

The Gap Funding Problem

If the seller doesn't have the 30% liquid (meaning they aren't "bringing cash" to cover their own equity), the DSCR lender might see the deal as too risky and back out. Or, more commonly, the seller needs *some* cash at closing for their next move, even if they're willing to carry the rest.

This is where "Gap Funding" comes in. A gap lender provides the short-term cash needed to satisfy the DSCR lender and get the seller some immediate liquidity, while the carryback position is finalized.

Why It's a "Pro" Strategy

The Stack Method requires highly professional coordination between:

• The primary DSCR lender
• The seller and their attorney
• The gap lender (La Casa De Cash)
• The title company

Because there are multiple layers of debt, the underwriting is more intense. We vet the DSCR terms and the seller's motivation to ensure our gap capital is protected by a viable, long-term exit strategy.

How We Bridge the Gap

If you have a Morby Method deal that is getting stuck because of a liquidity gap, we can help. We provide the short-term capital needed to bridge that 20-30% requirement, allowing you to close the deal and start collecting cash flow from day one.