Fund & Grow Financing

Creative Real Estate Financing
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Fund & Grow Financing

Justin SheleyBusiness Member
Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes

After listening to the Clayton Morris podcast (EP115 with Mike Banks) about the company Fund & Grow, I became intrigued with the idea of using business credit cards to buy rental properties using the BRRRR method. The whole concept seemed too good to be true, so I hopped on BiggerPockets to see what people were saying about Fund & Grow. I always find great content here, and more often than not I find the answer to my question before I even need to post and ask about it. However, with Fund & Grow, I didn't find much. (If anyone knows of a discussion about Fund & Grow that I didn't find please link me to it) There are a few discussions where people were considering using Fund & Grow to finance a deal, but none that I saw that went all the way through the process and used the funds to find a deal.

That being said, I decided to start this discussion post and share my experience with the company from day 1 till I refinance and hopefully complete the BRRRR method.

For anyone not familiar with Fund & Grow, they are a company started by Ari Page that helps you establish business lines of credit for the purpose of creating working capital for small businesses. In my case, I will be using the line of credit to buy properties in Rockford, IL and rehab them into rental properties.

Phase 1:

Currently I have enrolled with Fund & Grow and completed my initial consultation. This cost $3,000 for their service of negotiating and securing the business credit cards. I spent 1 hr on the phone with a very friendly consultant and discussed my plans for the business credit and established a sole proprietorship for both my wife and I. This allows the business lines of credit to not affect my personal credit score.  The first push for business credit will begin next week, and I should have access to an anticipated 60k by the following week. My wife is not currently receiving accounts yet until a more established credit history can be created for her.  We are currently lining up several refinancing options with banks in the area so that they are aware of what we intend to do. Currently we are being told that we can refinance the properties we buy with cash after 6 months. This is key for us, because we intend to buy and hold these properties and do not want to get stuck after the initial 12 months of 0% interest expires on our business credit cards.

Phase 2 is going to be actually receiving the cash into our account and making our cash purchase. I tried for brevity sake to not go into the entire Fund & Grow concept in my initial post, but if anyone has any questions, comments, or concerns I'd love to discuss them.

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Most Popular Reply

Drew Cameron
Lender · Peabody, MA · Member since 2015 · 82 posts · 49 votes
9y
I used a similar system to receive roughly $40,000 in credit cards at 0% for a 12 month period. The company I used took 10% upfront and then helped me liquidate everything so I had usable funds fairly quick. I was able to do a flip with the funding I received and pay back all the money before my interest free period ran out. It was expensive, but the flip more than covered everything and I was able to get in the game. I would do it all over again if I had to.
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  • Craig Wilcox
    Investor · TN · Member since 2014 · 508 posts · 167 votes
    9y

    Hi Justin,

    I am looking  forward to following your progress. Thanks for sharing. 

    Craig 

    9Reply
  • Account Closed
    Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes
    9y
    Justin Sheley please do share your progress regarding Fund and Grow.
    4Reply
  • Tom S.
    Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
    9y

    @Justin Sheley  Yes, definitely interested as well.  Keep us posted and good luck!

    - Tom

    2Reply
  • Mike B.
    Investor · Los Angeles, CA · Member since 2014 · 176 posts · 93 votes
    9y

    I'd like to see how this plays out. From my research on these types of companies with several different similar companies, under various names, they will charge you a fee to get you set up with this "strategy." That fee goes by many names but "Success" fee is quite common. The fee is typically 10% but can be different, of the amount that they "secure" for you.  The company supposedly set you up with business credit cards that do not reflect on your personal credit, however they need your personal credit score and history to acquire the initial cards.

    The company knows of credit card companies that offer 0% introductory rates, and when you combine several cards you can pull cash advances that equate to some amount. It's actually an interesting approach.

    However, the problem is that you have to pay the company a several thousand dollars and then on top of that, the credit card companies typically charge 3 or 4% of the amount drawn, which equates to another several thousand dollars, out of your pocket, that ultimately you have to pay up front..... 

    7Reply
  • Micah Markowitz
    Financial Advisor · St Louis, MO · Member since 2016 · 25 posts · 44 votes
    9y

    Why did you agree to pay an up-front fee?  There are other places you can go that do NOT charge ANY up-front fees.

    11Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    9y

    For what I am anticipating to get in return the upfront fee seemed worth it to me. My applications go out tomorrow, so I will soon find out how this is going to work out. @Micah Markowitz, would you mind sharing what companies will provide this service with no upfront fees? This is just the company that I became familiar with, but would love to learn about an alternative 

    11Reply
  • Petr Anisimov
    Santa Fe, NM · Member since 2016 · 32 posts · 16 votes
    9y

    In case you have not seen this. Clayton Morris has recorded the following webinar with Fund and Grow guys that could be access at https://www.fundandgrow.com/wrty/CYS534367 as well as at https://www.youtube.com/watch?v=YdLWAAzOjxg

    I would be interested to hear about your experience @Justin Sheley

    7Reply
  • Account Closed
    Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes
    9y
    Justin Sheley thanks for sharing.
    0Reply
  • Donnie N.
    West Hollywood, CA · Member since 2016 · 123 posts · 43 votes
    9y

    Thanks for posting this @Justin Sheley. I was starting to look at this as an option. Love to hear about your experience as you go. 

    • So they charge you $3,000 for the initial setup fee? ( I see $3,500 on their site)
    • What else is there after?
    • I see a $50/month fee some newsletter. Can you opt out of that? Or is that like their membership fee?
    • Do you have to pay the $3,500 fee every 12 months?
    • I also see that “Clients pay 9% of all funding received.” - So does that mean if I get a $100k credit, I actually owe $109k?

    So if I get a $100k, I'm paying roughly $12.5k for the service fee? (9%{$9k} + $3.5k) So I would essentially be paying 12.5% for a 12month line of credit. Am I off with my math here? If not, then the ROI on the investment has to be over 12.5% to make this worth it right?

    What other downside is there to using a service like this?

    2Reply
  • Petr Anisimov
    Santa Fe, NM · Member since 2016 · 32 posts · 16 votes
    9y

    @Donnie N. based on the video:

    1. They had a discounted price for participants of that webinar. I am not sure that it is a viable option now so $3,500 per person should be expected

    2. There are two payment plans: $3,500 gets you a one year of their service during this time they help you with your credit score if it is low and apply for credit cards 3 to 4 times; 9% option is pay-as-you-go on funds received. It is another way to pay for their service for those that do not want to pay $3,500 upfront, F&G does not expect to get $100k on the first round so one would not pay $9k but still 9% is high and one should switch to a yearly service if the desire to continue

    3. I do believe that one has to renew they service every year if they want more credit cards and if they need help with card stacking once initial promotion runs out

    4. I do not believe that you have to pay for the newsletter

    5. The main downside for me is that these are credit cards and if you want cash then one might have to pay % on cash advances. F&G solution to this is buying gold and selling it back. One might lose upto 2% on the spread based on F&G projection and bank might cancel the credit card if they suspect that you are trying to bypass their cash advance fee.

    6. If your personal credit score is low then you can bring a partner to use his credit score. Unfortunately, only participants of the webinar were getting by one get one free. One should expect to pay $3,500 per person.

    I am looking for more information from anybody that have actually done the program. I am planning to try this program myself to have money for to buy auctioned properties and rehab them.

    6Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    9y

    @Petr Anisimov @Donnie N.

    Petr, you nailed it with your explanation. 

    I paid $3000 because I used to link from the Clayton Morris podcast. You can choose to renew the service every year and pay the upfront fee again, but the representative from Fund & Grow explained that it is their desire to teach me how to do it on my own do that in a year I don't have to pay the fee, but will have the knowledge to just go do it myself. If you listen to the podcast with Mike Banks, he talks about the ability to just go do it yourself and not use Fund & Grow, but they view themselves as a valuable partner when establishing these credit lines for the first time.

    Once you pay, they automatically enroll you with a business newsletter that they have a 3rd party agreement with. You have the option to cancel that subscription at anytime.

    As far as the % being paid for this service. The way I figured was that in the course of the first year (3-4 pushes for business credit) I will get access to a minimum of $100,000. Paying $3000 for this service means I'll be paying 3% for a 12month line of credit, and even lower if I get more than $100,000.

    5Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    9y

    @Micah Markowitz

    Thank you Micah, I'm definitely going to look into Midwest Corporate Credit.

    2Reply
  • Micah Markowitz
    Financial Advisor · St Louis, MO · Member since 2016 · 25 posts · 44 votes
    9y

    @Justin Sheley they're located in the Chicago area, so go and meet them yourself.  Bailey's expecting your call.  And the best part?  No up-front fees.

    4Reply
  • Donnie N.
    West Hollywood, CA · Member since 2016 · 123 posts · 43 votes
    9y

    @Petr Anisimov @Justin Sheley  Guys, thanks for the clarification. That makes more sense to me now. I look forward to hearing about how it goes for you guys. Keep us posted. Thanks!

    1Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    9y

    So my credit applications were sent out Tuesday. I had a phone conversation with a representative at Fund & Grow on Wednesday. I was told that now that applications have been submitted I can expect it to be about 1-2 weeks until I have the cards in hand, and another 2-4 weeks for Fund & Grow to renegotiate the approved amounts to get me the highest amount of credit. I have been pleased with the overall customer service so far, but a little frustrated that I am still a potential 6 weeks away from being able to use this money. In Mike Banks podcast with Clayton Morris he makes it sound as though from the first phone call to cash in hand is usually about 4 weeks. So that hasn't been the case. But even if this takes another 6 weeks I still have confidence that this will be a great buying tool for this summer. I have lined up my re-finance options, so now its just a matter of receiving access to the capital to go about and buy.

    8Reply
  • Donnie N.
    West Hollywood, CA · Member since 2016 · 123 posts · 43 votes
    9y

    Thanks @Justin Sheley for the update. Good to know the timing expectations. Good luck. Looking forward to seeing how the rest of your process goes. 

    2Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    9y

    @Micah Markowitz I did look over the Midwest Corporate Credit website. At this point I'm pretty far down the rabbit hole with Fund & Grow so I plan to see that play out first, before pursuing any other option. It seemed like the service with Midwest was a similar concept, but what I didn't see upfront was how they are compensated. Do you know how they end up making money? Must be some sort of fee or percentage of credit raised.

    3Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    9y

    @Jeff Schechter If you end up using both services, I would really appreciate it if you posted on here and compared the two.

    4Reply
  • Jeff Schechter
    Developer · Nashville, TN · Member since 2016 · 484 posts · 406 votes
    9y

    @Justin Sheley No problem.  :)

    2Reply
  • Micah Markowitz
    Financial Advisor · St Louis, MO · Member since 2016 · 25 posts · 44 votes
    9y

    I just emailed you and Bailey together, @Jeff Schechter

    1Reply
  • Jeff Schechter
    Developer · Nashville, TN · Member since 2016 · 484 posts · 406 votes
    9y

    Got it...thank you @Micah Markowitz

    2Reply
  • Corey Robinson
    Investor · Fort Myers, FL · Member since 2017 · 40 posts · 65 votes
    9y

    I'm currently using Fund & Grow right now as well.  They sent my apps out April 28th and I currently have three out of the four cards that they applied for.  They're currently negotiating to increase my limits on these cards.  They have been successful in increasing the limit on one of my cards and will start the negotiations on the other two next week.  So far I've accumulated around 40K already so I'm excited to see where I'll be at by the end of month.  Like Justin said the process is a little bit more lengthy than expected but I'm happy with the way things are going so far.

    11Reply
  • Account Closed
    Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes
    9y
    Corey Robinson so what you are saying is you have 1 card with a $40K limit?
    1Reply
  • Corey Robinson
    Investor · Fort Myers, FL · Member since 2017 · 40 posts · 65 votes
    9y

    @Account Closed I have accumulated around 40K with all three cards so I'm hoping that value will double by the end of the month.

    4Reply
  • Account Closed
    Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes
    9y
    Corey Robinson I see. Thank you.
    1Reply
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