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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  • David Ivery
    Real Estate Agent · Venice, FL · Member since 2017 · 3 posts · 2 votes
    9y

    Cash apps, paypal, and even western union are all good options.  The best way is to work with vendors (businesses) that do this as part of their normal business.  They all take a fee (don't let anyone charge you upfront and don't go from ZERO to max in one transaction right after activation) and they can access amounts of 10,15, or even 20k or more all at once.  As you new business you might need to call before the transaction happens but it is possible.  This is something that I see all the time when our clients need 40 or 50k in the next day or two.  If you just need small amounts on a new card just set it up under your paypal and add funds to your paypal account with it.  Then do a bank transfer from paypal to your account.  Good luck

    2Reply
  • Maurice Colbert
    Rental Property Investor · Blacklick, OH · Member since 2015 · 111 posts · 80 votes
    9y

    I just completed my first round, I was able to get $43k,my guy tried to get more, but they wasn't budging off needing my tax returns. So now I am working on disputing my inquires tomorrow, I will work on that all day and make sure I get those off. The big thing is TIME, so you need to move next day or same day when they ask for stuff. 

    2Reply
  • Will Zena
    Rental Property Investor · Estero, FL · Member since 2016 · 195 posts · 105 votes
    8y

    @Maurice Colbert please let us know when you are able to convert the credit to cash using Fund and Grows methods. That seems to be the issue with others

    1Reply
  • Johnny Situ
    Rental Property Investor · Fort Mill, SC · Member since 2014 · 161 posts · 132 votes
    8y

    @Justin Sheley what is your strategy after the 12 months zero interest period, are you gonna renew your membership and ask F&G to reconstruct your credits? As buy and hold investors, we can't pay it back simply by cash flow within that short period of time without selling the property. Thoughts?

    0Reply
  • Maurice Colbert
    Rental Property Investor · Blacklick, OH · Member since 2015 · 111 posts · 80 votes
    8y

    @Johnny Situ that's a great point I didn't even think of that. Maybe refinance the property to get cash out to pay off the cards.

    2Reply
  • Johnny Situ
    Rental Property Investor · Fort Mill, SC · Member since 2014 · 161 posts · 132 votes
    8y

    @Maurice Colbert to my knowledge refinance only works when you have enough equities in the property since most banks won't be able to do full amount financing.

    0Reply
  • Benjamin Centeio
    Lake Elsinore, CA · Member since 2016 · 8 posts · 15 votes
    8y

    @Johnny Setzo that is correct, just like hard money you need to have an exit plan. You need to have the equity in actual cash on hand by the time you are ready to refi so you can pay back all of the unsecured creditors. Fund and Grow isn't free money, it's just creative financing.

    0Reply
  • Will Zena
    Rental Property Investor · Estero, FL · Member since 2016 · 195 posts · 105 votes
    8y

    @Maurice Colbert have you been able to use a strategy to pull cash out of the credit cards?

    0Reply
  • Maurice Colbert
    Rental Property Investor · Blacklick, OH · Member since 2015 · 111 posts · 80 votes
    8y

    @Will Zena I have not pulled money off of the cards yet, I don't have  house to purchase yet, so no reason for me to take it off. They do give you a few options on how to get the cash.

    0Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    8y

    @Johnny Situ I will be reconstructing my cards after they first 12 month period of zero interest is over, but my long term strategy is to refinance the property I have just rehabbed and pay back the card that I used in full. 

    Real life example: I just finished the rehab on a house I bought for 30k. I did a 20k rehab on the house and used my 0% interest cards that I obtained through F&G. I listed the house for rent yesterday, and once I have a tenant in place I will begin the refinance process. The comps right now show that the house should be worth 75-85k. So I will refinance the property as soon as I can and repay the 20k back to the CC companies. I will then have a rental property that cashflows each month with no personal money tied up in it, and 25-35k in equity. @Benjamin Centeio, you are absolutely correct, having an exit plan an the ability to refinance is key to this.

    3Reply
  • Eric M.
    Queens, NY · Member since 2014 · 73 posts · 12 votes
    8y
    Originally posted by @James Caruso:

    Any update on this? Were you able to cash out the credit?

     That's what i want to know.

    0Reply
  • Tae C.
    Flipper/Rehabber · Knoxville, TN · Member since 2017 · 130 posts · 72 votes
    8y

    @Benjamin Centeio

    You mentioned a couple months ago you were in process with them - curious to hear an update.  Have you been able to successfully pull the cash off the card(s)?

    1Reply
  • Benjamin Centeio
    Lake Elsinore, CA · Member since 2016 · 8 posts · 15 votes
    8y

    @Tae C.

    I plan to create a new post with a whole review of my experience, but here is the short version for now. 

    SLOW!!! I am very frustrated by their sense of urgency. I am told that the person working on my applications only works on them one day a week. So if something comes in the mail and I upload that to them to work on the day after the designated date, then nothing happens for another week. Applications went out on 10/10 and as of today only two of the five applied for cards are completely through the applications stage. Which means I have already lost a month of the 0% interest on the cards that are open.  It does look like the two cards I have can both just be balanced transferred to a bank account for cash, which is about $47,000 right now. Don't know exact terms, like I said will post later with full story. 

    I don't think the model is bad, just not happy with the speed of service. I have seen nothing yet to make me concerned about getting the cash off of the cards. Between paypal, venmo, and gold shouldn't be any reason you can't cash out on the credit. Also, I know that my personal card I use all the time runs with a balance of $5000 or so every month, so no reason I can't BT that off my card and then pay myself the cash I would have normally used to pay of the card.

    2Reply
  • Tae C.
    Flipper/Rehabber · Knoxville, TN · Member since 2017 · 130 posts · 72 votes
    8y

    @Benjamin Centeio

    That’s really good insight. A lot of focus, from me included, has been on just how effecient the pulling-cash process is...but it’s good insight to understand how seemingly inefficient their communication is as well. But at the end of the day, I would say having access to $47k a month in, though it may have been a month of wasted 0% interst opportunity, seems pretty solid. Of course, I am still curious for if and when you do try to access cash from it, how that actually goes - and also wonder Up to how much/how quickly you can access at one time. Looking forward to your in depth review, thanks for sharing!

    0Reply
  • Larry Burklow
    San Marcos, TX · Member since 2017 · 4 posts · 0 votes
    8y

    @Benjamin Centeio

    Thank you for your explanation.   Was there any limit to the amount you can balance transfer off the cards to your checking account? I mean if the card had a limit of $20,000, can you balance transfer the entire amount or is there a max %?

    0Reply
  • Will Zena
    Rental Property Investor · Estero, FL · Member since 2016 · 195 posts · 105 votes
    8y

    @Larry Burklow it probably varies per credit card company

    0Reply
  • Jesiane Fernandes
    Real Estate Agent · Pawtucket, RI · Member since 2017 · 10 posts · 1 vote
    8y

    thank you

    @Justin Sheley for sharing your experience, I will definaly  look into that.

    0Reply
  • James B.Pro Member
    Investor · Monterey Area, CA · Member since 2011 · 150 posts · 81 votes
    8y

    @Benjamin Centeio @Justin Sheley

    I’ve been thinking about this strategy.

    Is the analogy like borrowing to finance college? 

    So you obtain money now, promise repayment, hoping that future earnings will more than make up for it?

    Good to go if all goes well, but if not then interest compounds against you?

    Keep us posted-thanks 

    0Reply
  • Stacy Houston
    Valley Park, MO · Member since 2017 · 4 posts · 8 votes
    8y

    @Benjamin Centeio

    Which cards that you were approved for allow balance transfer into Checking?  The two that I was approved for only allow transfer from other credit cards

    1Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    8y

    @James B.

    I suppose you could look at it that way. The biggest danger I see in using these 0% interest cards is if the home does not re-appraise for what you think it will. So if you are unable to pay make the balance on your card you could be left paying a ridiculously high interest rate. My recommendation is that, although the goal with the BRRRR is to pull all your money out after the re-finance, you need to be prepared to leave some of your own cash in the deal if the appraisal in not favorable. The way I look at it, if I have to leave 3-5k in a deal that cashflows great then its not the end of the world. But you have to have some cash on hand to ensure that the shortage is not left on a credit card that will eventually switch to a very high interest rate.

    2Reply
  • Justin Young
    Investor · Honolulu, HI · Member since 2016 · 362 posts · 93 votes
    8y

    @Justin Sheley could you explain in detail how you transferred funds from your credit card to your wife's Cash app account. I tried doing that with my personal credit card but am having errors preventing me from doing so. Did you have the same problem? Did you have a workaround?

    0Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    8y

    @Justin Young This is what I did:

    - I created a cash app account on my phone. I linked this account to my business credit card obtained through fund and grow.

    - I took my wife's phone and created an account for her and linked it to our business checking account.

    - I would then send the weekly limit of $2500 from my account to my wife. This would charge $2500 to the credit card and deposit the cash into our checking so we could use it as working capital. I only did this transfer for certain parts of the rehab. Otherwise I just used the card when purchasing supplies, and avoided the 3% charge from the cash app.

    3Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    8y

    So its been quite the process, but I feel that I have reached an initial conclusion on using F&G to fund a deal. I re-financed my property today that I used my business lines on credit on, which finished the BRRRR method for this property.

    Rough Details

    Purchase Price: $30,000

    Rehab: $20,000

    Fees paid transferring money through cash app: $338.85

    Holding Costs/Utilities: $675.00

    Closing Costs:$1000.00

    Total Money Invested: $52,013.85

    Appraisal: $80,000

    65% Loan: $52,000

    Money Left in Property: $13.85

    ROI: We could do the math on $13.85 but lets pretty much call it infinite at this point.

    The coolest thing in my opinion about this method is that I'm left with a home that has a brand new roof, AC, and an entirely renovated interior. So our maintenance costs are going to be very low. And on top of that, we have $28,000 in equity on the house.

    So as far as Fund & Grow. I would say using there services definitely enabled me to do this deal. And since I have just paid down the cards to $0 I will be using that amount at 0% interest on the rehab I and starting right now. So I did not factor the initial $3000 cost into the numbers for the home I just finished because that one time fee will give me the capital to do 3 or 4 rehabs. So even if I use my 0% interest cards to do only 3 rehabs, the cost would be $1000 a rehab for that benefit. In my mind that is very much worth it. The biggest question I still have for myself is if I could've just acquired the business credit cards on my own and not paid out the $3000 up front cost. Ultimately, for me personally its pretty much a moot point. I'm glad that I took the action, and that capital has helped me achieve my goals for this year. I was not thrilled with F&G's customer service, I don't think they hold your hand through the process as much as they claim they do, and I agree that the process was much slower than it was made out to be in their promotional material. However, some of that may very well be on me. Perhaps they didn't hold my hand through the process because I wasn't calling and asking for help. Regardless, my $3000 initial investment gave me $29,000 to work with, and that money successfully completed one rehab and is about to be recycled to do another. And from what I've seen, the $29,000 is a very low result. I still am able to do another push with Fund & Grow, and also do a credit push under my wife's name. So that number can still go up. But even if is doesn't, it has been very helpful. I truly believe there are many many ways to raise the capital needed to do this work, but the business lines of credit seem to be a very viable strategy that you could also employ.

    13Reply
  • Maurice Colbert
    Rental Property Investor · Blacklick, OH · Member since 2015 · 111 posts · 80 votes
    8y

    @Justin Sheley great breakdown. I am about to start my next round here in a few weeks, I have to get the 2 inquires off my experian, my score has went back up to 790. My only issue is how about going to get the bank financing, is that in your personal name or a llc? Did you build the corporate credit up also?

    1Reply
  • Justin SheleyBusiness Member
    OP
    Investor · Rockford, IL · Member since 2016 · 94 posts · 220 votes
    8y

    I am purchasing the properties in an LLC with 5yr ARM's from a commercial lender. I've already used up my conventional loans, so we are using commercial loans now. Which honestly are much easier to work with, but just have more risk with the 5yr ARM, and a slightly higher interest rate. As far as corporate credit, thats honestly not something I've even looked at. Although I'm sure I probably need to. The downside of doing the rehabs myself is that I get so caught up in working on the homes, that some of the larger business practices get put on the back burner. Definitely something I've been wrestling with, working on my business instead of in my business.

    6Reply
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