Getting Funding: The Hardest Part of the Investing Rollercoaster

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As a real estate investor without a ton of liquid capital, I am always on the hunt for funding options. Those options are usually more of the creative persuasion, due to the fact that traditional financing is really difficult to come by. That being said, I have been asked by other real estate investors more times than I can count what funding options I have found—and what has worked?

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Different Funding Options

After we purchased our first buy-and-hold property with a HELOC, I was immediately on the hunt for more funding for a second one. This posed to be easier in my head than it was in reality.

Bank Financing

I tried multiple banks, and that ended up being a huge waste of time. The reason for this is that we purchase properties in our LLC — not in our personal names. It appears that banks simply have no tolerance to lend money into LLCs for buy-and-hold real estate. They seemed like they’d be more amenable to do so if we put the properties in our personal names. But we are simply not willing to do that — for both liability and tax reasons.

I went to our banks first. But none of the banks I visited were interested in lending to real estate investors. They say the risk is too high.

Then I tried another tactic. I started looking for out-of-state banks that were a bit larger, but not the big guys. Still, I got nowhere.

Related: How I Find Private Money Lenders to 100% Fund My Deals (& How You Can, Too)

The last thing I tried was working with off-market sellers in other states. These sellers had their own financing through their own local banks, so we figured that it wouldn’t be an issue for the bank to lend to us, since they already had the note.

No dice. None of these banks were willing to lend to out-of-state investors, even if we created a new LLC in that state.

I tried everything that I can think of regarding traditional financing, but we still just could not get it worked out.

Hard Money

After I spent countless hours working on applications for different banks to no avail, I decided to try the hard money route. This process was much simpler — except the fact that they still needed an ungodly amount of documentation to provide the initial approval.

I first got approved through Lima One Capital (there is a local branch here in Raleigh) and then got approved through Longhorn Investments out of Tennessee. Both companies were very similar in how they handled potential investors, and both were friendly. However, I felt that I got more personal attention from Longhorn and decided to go with them.

However, while I was able to get the initial approvals, it hit me that the interest rates and points were pretty darn high! Even so, we started looking for a second property, and we found a few that we were interested in that were within our price point. I reached out to one of the hard money lenders about these properties to see if they would qualify and to ask what could be lent on them.

Ultimately, the numbers just did not work out in our favor on any of them because the interest rate was just too high. Not only that, but they are very particular about what property they lend on. They have to perform their own appraisal for market value in order for them to even consider releasing funds. The process was just too difficult, and the rates were too high for buy-and-hold. This avenue might make better sense for a fix-and-flipper, especially because the terms are also so short.

The Fund&Grow Alternative

While all of this was going on, I had actually found a third funding option. Fund&Grow is a longer process than bank loans or hard money, so I signed up for the program in December of last year.

Initially, I was told that once I signed up, it would be a pretty easy process — as they do most of the legwork. The way it was presented to me was as follows:

  • They would apply for multiple business credit cards for me. Once we got them, they would then negotiate a higher credit limit for each one to maximize the amount of credit available.
  • Once the appeal process was complete (which could take a few months) then I could get the cash off the cards to use for purchasing real estate.
  • The cards they get us are 0 percent interest for anywhere from 12 to 15 months.
  • The process to get the cash off the cards is easy, and they said they would walk me through it once the appeals were completed.
  • The membership was for a year, and during that time they could potentially do this process multiple times to continually get us more money for real estate.

The way it actually went down for us was not that simple, unfortunately.

The Result

By the time they were done with the appeals, they had gotten us $43,ooo in funding. However, the bulk of that was on an American Express card, and the company refused to let us get cash out of it. I spoke to my Fund&Grow rep, who then sent me documentation as to how I could easily get the money out.

What I was sent did not make me happy at all. The way I was told to get the money out, besides a basic balance transfer, was through buying and selling gold.


That was not what I had signed up for at all. Nor did I have the time to even try to figure that out. Time is, simply, my most precious commodity. I just don’t have enough of it most days.

Needless to say, I was pretty ticked off. After all, I was never told anything about buying and selling gold before I signed up, and I spent $3,000 on their services.

Getting a Refund

At this point I was frustrated, and I didn’t have the time to deal with it. I let it drop for a few weeks before reaching back out to voice my displeasure. My rep was very professional and did her best to try and get me to reconsider when I asked for a refund. Ultimately, she agreed to submit the request for a refund. I received a call from senior level personnel the next day to discuss everything.

She wanted to go over everything that I was told and figure out why what I had been given wasn’t working for me. The long and short of this is that if our buy-in for a property is $50,000 and I only got funding for $43,000, then I still couldn’t buy anything. Not only that, but I couldn’t even get the money from almost half of that. So this was money that was just sitting there, not helping us in our quest to purchase more properties at all. And we paid $3,000 for it!

To her credit, she worked her tail off to try and find a solution to get us more funding and make the money work. But in the end, she just couldn’t satisfy our needs and sent us a refund check.

Related: Creative Financing: 5 Outside-the-Box Tools Savvy Investors Use to Build Wealth

But It’s Not the End

While we still don’t have the funding to get another property, this story doesn’t end here. I was asked on my last call with Fund&Grow if I would be willing to speak with the CEO and the COO. They were interested in my feedback, but they also wanted to potentially clarify some things that may have been miscommunicated.

I was more than happy to do that, and I was actually very impressed that the company was willing to hear what I had to say in hopes of creating a better experience for all of their clients and potential clients.

Basically, funding is a lot more difficult than a lot of us are led to believe. But because I have been digging in the funding trenches, I have run across some different twists on traditional funding. In my next article, I want to discuss how the calls went with the CEO and COO of Fund&Grow, and pass along information on how their program is actually intended to work. Stay tuned!

Have you run into funding issues like these?

What have you found has worked—and what hasn’t worked? Share your own experiences below!

About Author

Shanah Bell

Shanah and her partner Bryan are buy and hold real estate investors in the NC market. They own BellBert Investments, LLC (contact: [email protected]) and are always looking for new ways to creatively fund properties. By trade, Shanah is a Holistic Health Advisor with a Master's Degree of Nutrition who owns Adaptive Nourishment and is the co-owner of Cash Wives ExWives, which is geared towards keeping divorce from killing your finances.


  1. Kevin Sapp

    Buy and hold financing is going to be about you and the property until your biz grows. IMO, hard money is not the way to go for buy and hold unless you only need it to season the property. Even then, it will significantly degrade your profits.

    Fix and flip money is not near as hard to find. If your deal can’t work with private/hard/hybrid money, then the deal is not worth it. A good deal will find the money. Most local private lenders will have contacts. While they do prefer to see experience, if the deal is good, they will use their contacts to ensure the project goes smoothly and everybody wins.

      • Kevin Sapp

        Family, friends. A bank will lend if you give them the right ratio. Risk/reward. Banks don’t like financing high ratios.

        Split the financing, 70% from the bank and 30% on a high interest second if the bank will accept that.

        Partner with an investor. Give up some of your cash flow and/or equity to get the long term financing.

        If you are trying to fix to rent and don’t have cash reserves, it’ll catch up to you when your roof/HVAC/waterheater all give out in three months. This year I had a $5K repair bill on a tenant move out on a $900 a month property.

        • Shanah Bell


          Thank you for your take on this. The financing is definitely the most difficult part and banks don’t always want to play the game. I like the idea of private funding but since we have very little time to cultivate those relationships, we have found it difficult to find any, unfortunately. We may have to use a few different methods pieced together for our next property.

        • Kevin Sapp

          Oh Shanah Shanah Shanah,
          Not enough time to build a relationship to get private money, WOW. Send an email with an introduction, be honest. Find the deal, invite the lender to the walk through of the deal with you and your contractor, ask what they think and how much they would lend. Time wasted, time to type an email.

          I just did this last week. Never did business with the person before, they had a couple of deals under the belt, that I researched as well as a few more things about them.

          It was a small first deal, 55K purchase, 25K rehab (draws) ARV 120ish.

  2. Dan Redmond

    Over the years we have been dealt with funding issues and while they have always ended up being basically hard money solutions, the more important factor was the personal relationships. Not the I know a guy type of thing, actual relationships. Just yesterday we got a short term funding situation solved by actually asking a certain party for advice, but when told of the situation, he stated that he would do the deal himself. This was because we had gotten to know this individual over the last yeaar or so and he totally trusted us. Good luck to all.

    • Shanah Bell


      I think you are spot on with the personal relationships aspect, as that is what I have heard a lot lately. We are still working on creating more of the personal relationships, which is difficult for us because we have 5 school aged children and run 3 businesses, so it is difficult to find the time to network in person and create those relationships. That being said, we feel that when we are able to finally do that, the funding will be less of an issue because people will have a better idea of who we are and how reliable we are.

    • Shanah Bell


      Oh it has certainly been a learning curve because there is simply too much information and misinformation out there. All of my articles are about what we have done, what has worked and what hasn’t. I write these so that other investors and potential investors can see that this game is not as easy as a lot of the “guru’s” make it out to be. So much of the information out there tells how great investing is and how easy it is and how quickly you will make passive income, but I have found that is really not the case most of the time. Hence, the articles on what not to do. Hopefully, these will help others not make the same mistakes we have.

    • Shanah Bell


      I agree with that assessment. However, what I was sold on was the other investors touting this method because it was “easy” to then just refinance the property just purchased with the credit cards into a conventional loan. What I found was that aspect of it is not as “easy” as other investors are saying because banks just don’t have much tolerance for real estate investors, especially small ones. I do have another article coming out soon, as a follow up to this one, where I get into the nitty gritty of how Fund and Grow is supposed to work and really works for real estate investors, because I had the opportunity to have a couple of talks and screen shares with the CEO and the COO.

  3. John Murray

    Here is how the US does mortgage funding. There is Freddie, Fannie and Ginnie and they own about 90% of all mortgages in the US. All those banks, brokers and other institutions usually sell them to one of those government regulated corporations. It’s really like they are government corporations. Without them we would not do so well in real estate. You have to play their game, they hold the cards. The FHA and the VA crowd (low down) is Ginnie. Freddie and Fannie are the 20% plus down crowd. So if you are just starting out you will at some time be dealing with the 3 government mortgage machines. Some banks hold their own owner occupied properties but most will be sold and sold and sold. The reason this goes on is because without them there is no way that the US economy will grow. Learn to play the game or at least understand the game you are playing.

    • Shanah Bell


      Thank you for giving the quick run down on how the US mortgage industry works. I do understand how it works, I just think that it doesn’t work effectively. Big surprise there! When it comes to mortgages and real estate investors, it is a different ball game than it is for primary home buyers, especially when purchasing properties in an LLC versus your personal name.

  4. Mike McDevitt

    Why the avoidance of holding your rental property(s) personally?
    As you have already learned – – it makes financing (at least the first 4) a whole lot easier.
    And wouldn’t you be able to purchase excess liability insurance (and/or an umbrella) to address risk?
    You mentioned “tax reasons” as well. What do you mean by that?

    Our rentals are held personally. Until the umbrella premium gets higher than the cost of forming and maintaining LLC(s), that’s how we’re playing it.
    And an LLC wouldn’t be any benefit to us tax-wise. The sole-proprietor and LLC are both pass-through entities.

    I’m curious about your (and others) aversion to holding a limited number of rental SFRs personally.

    • Shanah Bell


      The main reason for holding properties in an LLC is for liability reasons. We have an umbrella policy also, but as somebody who has worked in property management, I have seen the damage that one bad tenant can do to a person/company. Due to that, we refuse to risk all of our assets and will only purchase properties in the LLC. It doesn’t cost much in our state to create an LLC and it makes my bookkeeping easier.

      But the perk in all of this, is that there so many different ways to do it that everybody finds the way that works the best for them, their experiences and their situation.

  5. John Murray

    LLCs are for the paranoid small investors. I can see an LLC for a slum landlord especially for multiple investors. States like Delaware and the like make billions on questionable businesses and their practices. If you are honest and a small investor get a umbrella policy and individual policies for each dwelling. I own about $3.6M of SFH rentals and my umbrella policy is about $1200 per year. In my state LLC are $150 per year for each unit. I have 9 and that would be more than my umbrella policy.

    • Shanah Bell


      Thank you for your perspective on LLC’s. However, I disagree with you in that we have an LLC for our rental properties for liability purposes because I have seen what tenants can do, even if you are an honest person, and refuse to have all of my assets potentially at stake just because of one bad egg, so to speak. The LLC in our state is $150 to start it but for liability purposes we can have 10 or more properties on that same LLC, so it really doesn’t make sense for us to risk everything by putting our properties in our name as opposed to an LLC.

      • Frankie Woods


        It’s actually pretty easy to “pierce the veil” on LLCs. There is nothing that will completely protect you from crappy tenets. Honestly, if you have an umbrella policy and give your LTV high [e.g. with refinances and HELOCs], your risk is low. Lawyers would not want to go after someone who only has 10-20k networth. Research Dave Van Horns work.

  6. willie morales

    Good article Shanah Bell.

    A few years ago, I used another company similar fund& grow(thanks for letting us know about F&G) same price $3k, but additional money they wanted if I wanted to get cash from the credit cards would have been another $6k!!! , I was pissed they asked for that much, plus most of the cards I got was in the $3-5 range per card!!! I didn’t want to manage that many cards.

    My other option is this one bank I have my money in provides balance transfer checks, and I used that to purchase a property a year ago with the cash from it..

    Right now I’m looking into seller financing/notes, as a way to avoid the fund and grows of the world. I won’t cut out banks, you never know if you will need them to Re-finance at a later date.

    • Shanah Bell


      Thank you for your feedback on your experience with funding, thus far also. I have found that the banks are very difficult but don’t want to rule them out either in case I need to refinance at some point. Seller financing is another option that I have also been looking into but that seems to be more elusive. From what I gather, there aren’t as many seller financing deals and the deals that are out there are given to people in their network first over somebody they don’t know. This makes complete sense to me, just from a risk factor perspective. I have only found one seller financing deal to date and it was not a good one, so I passed on it. What has been your experience looking for seller financing?

      Thank you,
      Shanah Bell

      • Dave Rav

        @Shanah Bell, its funny you mention Seller Financing. This is something I am currently investigating. Been firing off a few offers to stale listings over >90 DOM. No luck so far. But, I’m trying to be positive and persistent.

        • Shanah Bell


          I would love to hear how that works out for you! I haven’t tried reaching out to stale listings, because I really just haven’t had the time to devote to it. But if it is something that pans out for you, I would love for you to share!

  7. Dave Rav

    what a nightmare. Yeah, I have heard about the credit card thing. There are companies (several) that will do this service for you – get a bunch of credit cards which you (hopefully) can take cash from. I was never a fan.

    It truly amazes me the way the banks work. I have posted about this previously. So, let me see, banks WONT lend to someone with a 750+ credit score, with a positive history of RE transactions (whether flipping, land lording, whatever), decent business acumen, and better knowledge and understanding of the RE industry than at least half of non-investors seeking financing. But they WILL loan 100% to a first-time homebuyer with shoddy credit and with no knowledge of managing the biggest purchase of their life.

    Why? Because we’re labeled “investors” and therefore automatically are high-risk? Thats ridiculous.

    • Shanah Bell


      I completely agree and it is just ASININE! I am in the latter category and have owned a couple of houses as my primary residence as well as investment properties. I have never been late on anything and have a really good credit score. I am not a flight risk by anybody’s standards and yet, the banks are more willing to lend to people with no or bad credit history because they are a first time homebuyer than somebody with a long positive credit history. It just doesn’t make any logical sense to me and that is the part that I have a hard time wrapping my logical brain around.

    • Mark Thomas

      No, it’s not that all. There is a readily available market for conforming owner-occupied & non-owner occupied mortgages with personal guarantee from people who satisfy Fannie, Freddie, VA and FHA underwriting guidelines. Very few Fannie Freddie loans go bad on a percentage basis and VA and FHA loans are backed by the government.

      With the LLCs, the loan is backed by the property and that its. All it takes is maybe 10 in 100 properties backed loans to go bad to make the Mortgage Back Security (MBS) consisting of 100 loans to be nonsalable. If the RE prices take a dive like it did in 2007 and 2008, all MBSs (not just those that are nonperforming) maybe impossible to sell. Remember that when an asset priced bubble, prices are declining, the mortgage debt is the same or rising and LTVs are rising. Once LTVs rise above 80 or 90% many property owners will simply default on the loan, collect the rent and pocket the difference. Any bank portfolio manager with half a brain will avoid these type of assets like the plaque especially when prices are overvalued as they are now.

  8. Jeremy A.

    had good success with local credit unions, did two deals with same fcu in 3 months. did two refis on same house with state wide mortgage broker, did one very slow 65 days with local bank, about refi 3 unit with national lender.
    love credit unions.

    • Shanah Bell


      Our local credit union is on my list. But so far, they seem to only want to lend if we purchase the properties in our own name and not our LLC. So I am going to have to track some more credit union’s down in this state to see if any of them have a better tolerance for investor’s purchasing properties in an LLC.

  9. Laura Verderber

    Looking forward to your follow up article, although I have to say personally Fund & Grow has been great. Maybe it was a communication issue. I was not surprised by their methods. Also, have you thought about buying in your name than transferring to an LLC?

  10. Susan Armstrong Fisher

    Does your state offer Series LLCs? The set-up allows you separate each property into a separate series, protected from each other, so that all of your properties are not at risk due to one going bad. Yet, they are under one umbrella LLC, so you’re not setting up multiple different LLCs. Also, what about buying the property in your individual name, and getting the benefits of borrowing money,, then transferring it into the LLC after-the-fact? Asset transfer is an easy process.

    • Shanah Bell


      We can do a Series LLC when the time comes to do so, but for now we are keeping the properties under one LLC until we get more of them. We are not willing to purchase the properties in our name doe to the threat of a bank pulling the “due on sale” clause. Which, while we know doesn’t happen very often, it can still happen and I have heard enough stories from other investors of it happening to them, so we don’t care to risk it.

  11. Frankie Woods

    Why don’t you just do this yourself. Find a business credit card that offers 0% interest for x months on cash advances. Get convenient checks and write yourself / LLC a check. Alternatively, find an business credit card that has 0% for x months on balance transfers. Take a cash advance from another credit card. Transfer the balance to your business credit card.

    • Shanah Bell

      Frankie, I agree that it is something that I can do also. We don’t have a business credit card for this business yet, so that is something we are looking into as an option. But, the bigger issue is still really how to get the property into a conventional mortgage after purchasing so that we don’t end up having to pay any interest on the business credit cards. We have been having a really hard time finding any bank that is willing to play with us because we don’t own enough properties yet.

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