Stack Funding in California | Swift Deal Funding
Stack Funding in California
Stack — the Morby Method — supplies the cash that has to be in escrow at closing when a seller carry-back note is covering the down payment but the escrow officer still needs real funds in the account to close. We wire the cash; a recorded second-position seller-carry note then repays us plus a flat 2.5%. It’s the tool for California creative-finance deals where the structure is sound but escrow needs liquidity on closing day. With California’s high values, Stack amounts run larger here, typically $30,000–$100,000, with capacity to $10 million.
California’s expensive markets produce a steady stream of subject-to and seller-finance structures, especially around Los Angeles, San Diego and the Bay Area where owners hold deep equity and may prefer to carry paper rather than take a full cash-out and a large tax hit. Across nearly 39 million residents, Stack lets investors close those creative structures without locking their own capital in escrow.
Direct lender, no credit check, no income, no tax returns — your contract and seller-financing terms underwrite it.
How Stack Funding closes in California
California is escrow-driven, so a neutral escrow officer runs the closing and records the documents — an independent escrow company in much of Southern California, or a title company’s escrow division in Northern California, not a mandated attorney. That officer disburses our cash at settlement and records the seller-carry note (a deed of trust) in second position with the county recorder.
The dry-funding rule shapes the timing: the escrow officer disburses only after the deed records, so our funds sit in escrow until recording confirms, and the second-position note records as part of that same closing-day sequence behind the first lien. We require written confirmation from the escrow holder that the note will be recorded as agreed before we fund, and the carry-back must cover the down payment plus closing costs. California’s licensing rules are strict, so confirm the recording sequence with your escrow officer and your overall structure with a California real estate attorney.
Pricing
Flat 2.5% of the funded amount. No upfront fees — collected through the closing statement:
| Funded Amount | Fee |
|---|---|
| $50,000 | $1,250 |
| $100,000 | $2,500 |
| $500,000 | $12,500 |
| Up to $10,000,000 | $250,000 |
What you’ll need
- Executed purchase contract with seller-financing terms
- A seller carry-back at least covering the required down payment plus closing costs
- A California escrow holder ready to record the second-position note (aware of the dry-funding sequence)
- Written confirmation from the escrow holder that the note will be recorded as agreed
A typical California Stack scenario
An investor structures a subject-to deal on a Long Beach duplex with deep equity: the seller carries a $95,000 note covering the down payment and closing costs, but the escrow officer needs $95,000 of real funds in escrow to close. We wire $95,000 ahead of closing. Documents sign, the Los Angeles County recorder confirms the deed, the escrow officer disburses and records the seller-carry note in second position; that note repays us $97,375 — the $95,000 plus the $2,375 fee — leaving the investor’s capital untouched.
Apply
Submit your purchase contract and seller-financing terms online; we coordinate the carry-back recording with your California escrow officer and the dry-funding timing.
Frequently Asked Questions
How does California's dry-funding rule affect a Stack closing? +
Stack puts real cash into escrow so a deal with a seller carry-back can close. In California, a dry-funding state, the escrow officer disburses only after the deed records — so our funds sit in escrow until recording confirms, and the seller-carry second-position note records as part of that same closing-day sequence. In high-volume counties like Los Angeles this is routine, but the timing hinges on the recorder's cutoff. Confirm the recording timeline with your escrow officer before scheduling.
Who records the second-position note in a California Stack deal? +
California is escrow-driven, so the escrow officer who runs the closing — an independent escrow company in SoCal or a title company's escrow division in NorCal — also records the seller-carry note in second position with the county recorder. We need written confirmation from the escrow holder that the note will be recorded as agreed before we fund. Given California's high values, these deeds of trust are larger than most states, so the recording detail matters.
When does Stack make sense on a California deal? +
Stack fits creative-finance deals where a seller carries a note covering the down payment, but the escrow officer still needs real funds in escrow to close. California's high prices produce a lot of subject-to and seller-finance structures — common around Los Angeles and the Bay Area on properties with deep equity. We supply the escrow cash; the recorded carry-back note repays us plus a flat 2.5%. If the deal has a big assignment fee instead, Echo usually fits better. Confirm your structure with a California attorney.
Apply for Stack Funding in California
Submit your application online — same-day decisions for complete files before 2 PM Eastern.