Fund & Grow Financing

Creative Real Estate Financing
9yFollow

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.

43Reply
8,894 views

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.
18Reply
See this reply in the discussion

885 Replies

Jump to latestLatest
  • Donnie N.
    West Hollywood, CA · Member since 2016 · 123 posts · 43 votes
    9y

    To the group.

    So this might be a dumb question but help me understand how this works. (as I’m still interested to look in to this as an option in the future.) How do you convert the credit in to cash for purchase? Do you have to get a cash advance from each of the individual credit cards? If so, what’s the cash advance penalties? If any. Once you get the advance, is it then transferred to your checking account (per say)? Or do they give you checks and you have to write yourself a check to then put into your account?

    Just want to get a fuller picture as to the overall timing from application process to actually getting the cash in to my hands to actually conduct the purchase. Also, how long do you have to pay back the credit cards before any interests kicks in? 12months? If you don’t pay full in 12 months, then what happens? Does the interest kicks in? If so, how high/low is it?

    Thanks again for starting this group. This info is very helpful. At least we’re not talking to a sales person and just exchanging ideas.

    7Reply
  • Corey Robinson
    Investor · Fort Myers, FL · Member since 2017 · 40 posts · 65 votes
    9y

    @Account Closed If you any other questions just PM bro!

    @Donnie N. Here's the link to the webinar that I watched before I signed up:

    https://www.youtube.com/watch?v=WXNiLo1eh44&featur...

    They told me in my call I would be able to get a checkbook from the banks/credit card companies I applied for and write a check to be deposited in my account.  From what I understood the max most of their clients pay is a 2% charge of whatever you pull off which is far less than 27% for a cash advance.  They promise 0% interest for 18 months and will teach you how to continue to get 0% or low interest on your cards year after year.  I'm a big believer in leveraging other people so I asked if I could re-enroll into their program just so they could continue to negotiate 0% interest on all my cards and they said plenty of people do that and that they offer a discounted price if you do.  Right now I'm in phase 1 so they're getting the lines of credit for me and the next phase will be teaching me how to pull cash off the cards and how to keep that interest rate at 0% so time will tell if this was a good investment but I'm happy with my results thus far.

    7Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    9y

    @Donnie N. That is the part of this process that I am most nervous about. Actually converting the line of credit to cash on hand. I am wanting to use the money for the purchase of property, not just rehab costs. Fund & Grow is supposed to provide support through the entire process of turning the credit into cash. Some of the cards will give the freedom to write convienence checks. This seems like the easiest way, to just write yourself a check and deposit it your own account. Otherwise Mike Banks has talked about the ability to purchase Gold online with the cards and then withdraw the funds 2 days later. This method comes with a 2% fee, but would be cheaper than the cash advance penalties.

    I'll let you know as soon as I've recieved funds, right now it's seeming like a 8 week process, but we'll see.

    As far as the interest goes, you have the 9-12 months as an interductory rate at 0%. And then the rate will go up to its normal rate, probably 12-15% depending on the card. So it's very important to have refinancing available so your not still sitting on that cash when the normal interest kicks in.

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

    Thanks @Corey Robinson and @Justin Sheley!!! Looking forward to hearing about how the whole process goes in a few weeks. So far it seems like it's not a big deal. The only draw back (minor) is the  time period from application > credit > cash > purchase. Good luck guys! Keep us posted. 

    1Reply
  • Jaye Seay
    VA · Member since 2016 · 35 posts · 24 votes
    9y

    @Justin Sheley and @Corey Robinson Thanks for creating and contributing to this thread!  I had been thinking about using Fund & Grow but was unsure how to practically use the credit lines to actually purchase and rehab property.  I wasn't able to find much information about this until I found this thread.

    I do have a question though.  How is it that this doesn't affect your personal credit?  Does a credit inquiry from Fund and Grow or the banks show up on your personal credit report?

    If you were in the middle of a personal loan for a primary residence or something like that, should you wait until that is closed before engaging Fund and Grow?

    4Reply
  • Martin Smith
    Investor · Monterey Park, CA · Member since 2016 · 1 post · 15 votes
    9y

    Hi All - 

    I'm new to BP and have mostly been absorbing but finally found somewhere I can contribute!

    I have gone through the first round with Fund & Grow and received 80k in credit.  This was made up of Amex 50k, US Bank 15k and BOA 15k.  I am now in the process of getting inquires removed for the next round of funding.

    Fund & Grow was better than other options that charge a success fee.  With the typical 10% (some were 20%) this would have cost be 8k. I only paid 3.5k and expect another round of funding.

    Another benefit that shouldn't be overlooked is F&G allows you to add another person to your account for free.  My wife is in the process of going through the first round of funding and did not have to pay anything beyond the 3.5k I paid upfront.

    15Reply
  • Loren Davy
    Investor · Kerrville Tx · Member since 2013 · 70 posts · 26 votes
    9y

    I want to watch this thread.

    3Reply
  • Corey Robinson
    Investor · Fort Myers, FL · Member since 2017 · 40 posts · 65 votes
    9y

    @Jaye Seay they set up an entity for you which then they'll apply for business lines of credit.  I've been watching my credit through the process to make sure my credit wasn't affected and nothing has changed since I've applied.

    The webinar they had was pretty informative.  Here's the link:

    https://www.youtube.com/watch?v=WXNiLo1eh44&feature=youtu.be

    7Reply
  • Jaye Seay
    VA · Member since 2016 · 35 posts · 24 votes
    9y

    Thanks Corey. I'll check out the webinar.

    0Reply
  • Jaye Seay
    VA · Member since 2016 · 35 posts · 24 votes
    9y

    Do you have to set up another business entity (like an LLC) to move the business credit converted to cash into in order to make the real estate acquisitions? This would make it a business to business transaction.

    3Reply
  • Michael Perry
    Hyattsville, MD · Member since 2017 · 42 posts · 57 votes
    9y

    Just throwing my 2 cents in there, I'm currently enrolled in Fund&Grow. I completed phase 1 and have $75k in credit. The inquiries that did show up (only 2 of 4 showed) have been removed from my personal credit and I'm priming for round 2 of funding. From my first application to receiving the cards took about 3 to 4 weeks. Their staff was very friendly, super knowledgeable and very very thorough with explaining every step to you so you know what to expect. If anyone has any questions please let me know 

    PS. The other services like this charge a success fee which is a % of the funding you get... this is NUTS to me. I'm expecting to get around $250k to $300k in credit through this process - paying $3k down is much more palatable than paying even 5% credit acquired for a success fee. BTW all the places I've seen, actually charge 10% success fee which is just plain crazy to me. Up front fees aren't inherently bad in and of themselves. In this case it's just a better option - plus you can write it off as a business expense too.

    17Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    9y

    @Michael Perry Thank you for sharing your 2 cents Michael. Did you have any trouble converting the $75k in credit to workable cash?

    3Reply
  • Michael Perry
    Hyattsville, MD · Member since 2017 · 42 posts · 57 votes
    9y

    @Justin Sheley So far I have just been using it as credit cards. One of my cards offers convenience checks so if need be I'll go that route. I've thought through using the gold route and I'm willing to do that if need be, I just haven't had a need great enough for that yet though 

    3Reply
  • 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.
    18Reply
  • Jamie Patterson
    Durham, NC · Member since 2016 · 2 posts · 1 vote
    9y

    Interesting thread! Excited to see how this turns out. Will check out the webinar and website now.

    1Reply
  • Donnie N.
    West Hollywood, CA · Member since 2016 · 123 posts · 43 votes
    9y

    @Drew Cameron Do you mind sharing which service you used? Love to have something to compare it with. Agree with @Michael Perry that the upfront charge sounds more logical. However if your, Drew, service will do the extra leg work to convert the funds in to cash for purchase then paying the little extra might be worth the effort. 

    What do you guys think?

    2Reply
  • Jesse Smith
    Santaquin, UT · Member since 2015 · 8 posts · 1 vote
    9y

    very interesting, following to see how this plays out, I've seen similar programs but they charge a % of funds raised.

    0Reply
  • Micah Markowitz
    Financial Advisor · St Louis, MO · Member since 2016 · 25 posts · 44 votes
    9y

    @Justin Sheley, they get compensated by a fee solely based on success, zero up-front fees, free consulting on these lines and how to milk them well for life.  @Jeff Schechter, how did your meeting with Bailey go?

    0Reply
  • Jeff Schechter
    Developer · Nashville, TN · Member since 2016 · 484 posts · 406 votes
    9y

    @Micah Markowitz  Good initial meeting.  I'm going to make application.  I'll keep you posted.

    0Reply
  • Micah Markowitz
    Financial Advisor · St Louis, MO · Member since 2016 · 25 posts · 44 votes
    9y

    @Michael Perry Were they personal cards, or were they business cards?  Meaning, do they report to your personal credit at all?  Also, do they remove the inquiries for you in-house included in the fee?  How many inquiries were created?

    @Jaye Seay It depends - The bank makes a hard pull that's good for 45-60 days towards the beginning.  If the finalization of the loan will happen before they have to pull again, then it shouldn't be a problem to work with one of these programs.

    0Reply
  • Michael Perry
    Hyattsville, MD · Member since 2017 · 42 posts · 57 votes
    9y

    @Donnie N. Once you have your first round of cards (there are 4 rounds total with 3 to 4 cards each round included in your upfront payment) they send you a detailed document that addresses 2 things:

    1.) On how to get the inquiries removed from your credit. It's easy to follow and I got the inquires removed within a week after I started the process to remove them.

    2.) On how to easily convert your credit into cash. They walk you through each item and you can ask and call back to get as many questions as you'd like.

    4Reply
  • Michael Perry
    Hyattsville, MD · Member since 2017 · 42 posts · 57 votes
    9y

    @Micah Markowitz These are business cards, in a business entity they help you set up (all state filing fees for this entity etc... are all covered with the up front fee). They do not report to your personal credit.  As far as the inquiries, see above. If you want to get the inquiries removed for you then there is a company they partner with to do that for you and that is an additional $1k - for unlimited inquiry removal for 1 year (also they will clean up anything else on your credit that you need within that year as well).

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

    @Donnie N. If other companies are charging a 10% success fee, I'd definitely say it is not worth them doing the extra leg work to covert funds. We're talking about the possibility of $250k in credit lines over the course of a year. That means I would be paying $25,000 for that company to do the extra legwork of converting credit to cash. When a company like Fund&Grow is going to walk me through the process anyway. Thats a $22k difference between me paying a upfront fee and a success factor. I personally will put in the extra effort for $22k.

    4Reply
  • Michael Prassel
    Lake Forest, IL · Member since 2015 · 2 posts · 4 votes
    9y

    I have successfully used Fund & Grow to get $104k across 4 credit cards (75k from the Amex card). My wife is about to go through the same process.

    My problem is struggling to convert this into cash though. One of the F&G employees recommended using PayPal to convert to cash and that was a HUGE mistake. I tried doing this with the Amex card and Amex started to go through the process of closing my account. I convinced them to keep it open but I'm not sure where to head next. The Amex was also denied on the Gold website F&G recommends.

    Let me know if anyone has any success extracting cash from these cards (especially the AMEX one). Thanks!

    4Reply
  • Jaye Seay
    VA · Member since 2016 · 35 posts · 24 votes
    9y

    If you were to use the cash advance features, are there any limits to how much cash you could get?

    In other words, if you took a cash advance from your AMEX card, could you get a cash advance for the entire $75k?

    4Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free