Master The
Morby Method

Understanding the Strategy

What Is the Morby Method?

Also Known as The Stack Method

Here's how Pace Morby himself explains it: "The Morby Method is my stack approach for sellers who want more cash than makes sense: first-position DSCR or conventional loan, a one-day gator fronting the down payment in escrow, and a seller carryback that records in second after closing. You close like a normal loan, then the seller leaves a portion in escrow, the gator is repaid plus a fee, and you own the asset with the bank in first, the seller in second, and little to none of your own cash in the deal."

The Morby Method and the Stack Method are the same thing — it solves the "I want a big down payment" objection on paper while preserving your capital across asset types, when your lender, title, and paperwork are dialed in.

How It Actually Works — Step by Step: You structure a Morby Method by locking the first, controlling the escrow, and papering the seller's second so the gator can be repaid from held funds. It's two legs that look like one closing.

Leg One: Negotiate the cash contract and get a real term sheet from your senior lender that covers the bulk of the price. Keep the contract clean for the lender. The creative terms live in a separate confidential addendum the lender never sees. Title and escrow need both, plus clear holdback instructions so they don't disburse all proceeds at leg one. This keeps the gator safe and gives you room to create the seller's second after closing.

Leg Two: Fund the table. The lender wires their first-position loan. The gator wires the down payment into escrow for one day. You close. Immediately post-close, escrow uses the holdback release to record the seller's carryback in second position and send the gator their money back plus the agreed fee. On paper, the seller received their number at closing, then elects to leave a portion in escrow and take it back as a secured note in second.

Seller Terms: Small or no cash net to them at closing beyond fees and liens, interest-only payments for a period, long amortization with a manageable balloon, and no prepayment penalty so you can refinance or sell when it suits you. You can also defer part of the down as timed payments post-close — like splitting it into two checks six months apart.

The Lien Stack: Face amount of the second, interest rate, payment structure, term length and balloon date, due-on-sale stance, late fees, and a clean prepay clause. Pair the promissory note with the deed of trust or mortgage recording in second so the lien stack is crystal clear: bank in first, seller in second.

And that's where Levine Capital comes in. We are diversified with our capital and tailor the loan product to meet the needs of each client. We work with Top Tier Transaction Coordinators who help facilitate the entire transaction — working with title companies, getting them onboard, or helping identify an investor-friendly title company. The result? You can close with little to no money out of pocket — and even pay yourself to close on the deal.

What We Need

Pre-Qualify for the Morby Method

We need to know your whole scenario — you as a borrower. If you are not credit-worthy, there are ways to possibly bring in private money partners. Here's what we evaluate:

White Glove Service

Need More Help? We've Got You.

If you need more hand-holding — whether it's help negotiating terms with the seller or understanding the paperwork — we provide resources every step of the way.