Inside The Arch Street Capital Stack: How Everyday Investors Get in the Deal

If you’ve been following our Arch Street project or exploring and learning about real estate syndications, you’ve probably heard the phrase “capital stack.”

It sounds like Wall Street jargon, but it’s really just a simple way of answering three questions:

• Who’s putting in the money?
  
  
• In what order do they get paid back?
  
  
• Where does your return actually hit in that lineup?
  
  

In this post, I will walk you through that in plain English, using Arch Street as the backdrop, so you can see how everyday accredited investors join a Boise development like this without having to build it themselves.

The Basics

Picture the Arch Street site for a second: today it’s plans, approvals, drawings, dirt. The goal is to turn that into finished townhomes and a small multifamily building that real people live in.

To get from “dirt and drawings” to “doors and residents,” we stack together a few different types of money:

1. A construction loan from a bank or private lender.
   
   
2. Our own money as the sponsor team.
   
   
3. Investor capital from people like you.
   
   

All of that together is the capital stack.

The lender is at the bottom of the stack. They get a lien on the property and earn a set interest rate. They get paid back first once the project becomes profitable.

Equity—actual cash invested—comes next. Equity gets paid after the lender, but if the project performs well, equity shares in the upside. The equity is the money that we’ve all invested in the project PLUS the additional value we’ve all created. That’s the trade: more risk than the bank, more potential reward if things go to plan.

The three layers in Arch Street-type deals

Here’s how each of those layers look in real life.

First layer: the construction loan

This is usually the biggest dollar amount in the project. The lender funds a large portion of the total cost—land, horizontal work, vertical construction—based on a conservative view of value and rents. They’re not trying to swing for the fences. They want their money back with interest.

Second layer: our own capital

Next, the sponsor team (that’s us) puts in our own money. This is often called “GP capital” or “co-investment.” It matters because:

• It proves we believe in the deal enough to risk our own dollars.
  
  
• It aligns us with you; if the deal doesn’t perform, we feel it too.
  
  
• It helps unlock better loan terms and confidence from everyone involved.
  
  

If a project doesn’t pencil for us on our own money, we don’t shop it to investors.

Third layer: investor equity (your lane)


The final piece of the stack is investor equity—the checks written by passive investors who want in on the project but don’t want to be the ones dealing with city planners and contractors.

As an investor, you become an owner in the project entity. You’re not personally signing on the construction debt, but you are true equity. That means real risk and real potential upside.

Where your dollars actually go

A question I hear a lot is, “Okay, but what is my money doing in there?”

In a ground-up project like Arch Street, investor equity typically helps cover:

• Pre-development and entitlement – Surveys, engineering, architecture, city applications, fees, all the upfront work to turn “nice idea” into “approved project.”
  
  
• Land and horizontal work – Final land costs, grading, utilities, road work, and getting the site build-ready.
  
  
• Vertical construction – Framing, roofs, siding, interiors, common areas…all the sticks and bricks.
  
  
• Reserves and contingency – Buffers for interest, surprises, and timing hiccups.
  
  

The lender doesn’t just drop a pile of cash on day one; they fund draws as we hit milestones. Equity is what gives the project the cushion and flexibility to keep moving and handle the pieces the bank won’t pay for upfront.

How investors typically get paid (in normal-people language)

Every offering has its own legal structure, but most syndications follow a similar logic.

Here’s the high-level picture of how investors are often compensated:

• Investors may receive a preferred return—a target annualized return that is paid to investor equity before the sponsor participates in profits (assuming the project generates enough cash).
  
  
• When the project is refinanced or sold, there’s a capital event where investors may receive their principal back and a share of the profits.
  
  
• After investors receive what they’re due per the agreement, remaining profits are split between investors and the sponsor team according to a pre-defined percentage.
  
  

For Arch Street, all of the exact details—minimums, targeted returns, fees, the waterfall, the risk factors—live in the Private Placement Memorandum (PPM) and related documents, not in a blog post. That’s on purpose. You should always make decisions based on the formal documents, not marketing copy.

The big idea: as an investor, you should clearly see on paper how the money comes back to you and how the sponsor gets paid.

Why we like this model for Boise infill

So why bother with all this structure instead of just buying another single-family rental?

A syndication model makes sense for a project like Arch Street because:

• It allows us to take down and build out a bigger, better-located infill site than most individual investors would want to take on alone.
  
  
• It lets everyday accredited investors own a slice of multiple homes and units in a strong Boise location instead of tying everything to one door.
  
  
• It creates alignment: lender, sponsor, and investors all have clearly defined roles and incentives.
  
  

Boise still has a real housing problem. We need more well-located, functional units in existing neighborhoods—not just sprawl on the edges. Projects like Arch Street are one way we can help solve that while also creating a path for investors to participate.

No guarantees, no magic. Just using the right tools to fund the right kind of project.

What it looks like to invest alongside us

If you’re curious what it would actually look like to join the Arch Street capital stack, the process is pretty straightforward:

1. We talk – You read pieces like this, then hop on a call or join a webinar where we walk through the project, the plan, and the risks in plain English.
   
   
2. We confirm fit – These offerings are typically limited to accredited investors under SEC rules. We make sure the deal type and time horizon match your goals.
   
   
3. You review the docs – You get the PPM, operating agreement, and subscription documents. This is the stuff you review with your CPA and attorney.
   
   
4. You commit and fund – If you decide to move forward, you sign, fund, and become an owner in the project entity.
   
   
5. We execute and report – Our job is to manage design, entitlement, construction, and lease-up, and to keep you updated along the way. When there’s a capital event, investors may receive distributions per the terms of the docs.
   
   

We treat everyone in the stack like a business partner. We win or lose together.

Want to see the Arch Street details?

This article is meant to explain the big picture. It is not an offer to sell or a solicitation of an offer to buy any securities. Any actual offering for Arch Street is made only through the confidential Private Placement Memorandum and related documents, which spell out all risks and terms in detail.

If you’d like to:

• See how the capital stack is structured for Arch Street specifically, or
  
  
• Talk through whether a Boise infill development belongs in your portfolio,
  
  

reach out and we’ll schedule a short, no-pressure conversation. Action beats analysis—but only when you understand what you’re investing in.