Funding For Flipping

71 Replies

@Joe Kalis    being a NMLS licensed mortgage banker I have a little understanding how FICO"S go

if you take out all your available credit it will hammer your Fico that's a given

this is why mortgage lenders pull credit once you pay down your cards..

could be a moot point just pointing that out..

@Saul G.   good questions.  as I don't need to use credit cards for my business ventures it does not come into my equation I use them to build up Points so I can take fabulous vacations for free .. that's what credit cards are to me personally   :)  good luck with it all.

hate to see someone go out and ring up 6 figures in credit card debt then buy a bummer and be stuck with the debt they can never repay... seems risky. But then again many small business are started on Cards.. so I have no problem with it personally for others .. as long as they understand the risk..

Its no differernt in my mind than paying 40k for a guru course only to figure out your not cut out for real estate and never really do any deals... here you can go into massive credit card debt only to find out RE is not all that its cracked up to be

I'm wondering the qualifications for buying multi families.  If I have the 20% down.  And show its cash flow would most banks do the deal?

Originally posted by @Jay Hinrichs :

@Saul Gonzalez  good questions.  as I don't need to use credit cards for my business ventures it does not come into my equation I use them to build up Points so I can take fabulous vacations for free .. that's what credit cards are to me personally   :)  good luck with it all.

hate to see someone go out and ring up 6 figures in credit card debt then buy a bummer and be stuck with the debt they can never repay... seems risky. But then again many small business are started on Cards.. so I have no problem with it personally for others .. as long as they understand the risk..

Its no differernt in my mind than paying 40k for a guru course only to figure out your not cut out for real estate and never really do any deals... here you can go into massive credit card debt only to find out RE is not all that its cracked up to be

 Oh yea definitely, I'm assuming the individual has already made up his head, has a solid plan, and it's just pure execution.

Now that you mention points, I wonder what type of rebate, sign up bonus would some of these cards have? 2 years worth of those?

DO NOT BOTHER! just got of the phone with a salesman. First of, they are very unprofessional. Secondly all they do is go out to multiple banks, apply for introductory credit cards. Which you can do yourself. Also, they forgot to mention that it is personal credit base, and it will impact your credit score with that many multiple inquires. They fail to mention you need 600 + credit score. With that just go get a conventional loan.

I want to let everyone know about the horrible experience that I have had with LENDINGHOME.  They cost me a lot, and I do me a lot of time and huge amount of money based on income lost due to their issues..  I  wish I had known how unreliable they were.  I jumped through a ton of their hoops and was told that the deal was good to go.  2 days after I was supposed to close on the loan, the rep called and said that they could not process the loan due to the property being "mis-catagorized" by the initial agent??  What the heck???  I lost several months of revenue as I scurried to get another lender (private) to get the deal done.  BEWARE!!!!!

Hello everyone about funding for flipping I thought that it might be  a scam from the beginning because the old saying goes if it sounds to good to be true then it probably is lol right ? nope wrong the truth ! google  the rip off report they will explain. 

Here's a podcast that does a pretty good job of explaining/selling the program. Its basically credit cards at 0% interest during the introductory period. There is a cost because the company (in this case Seed Capital) charges for their services - but only if you access the credit. Also, you're personal credit score takes a bit of a hit.

If used responsibly, I can see how this would be a good tool in the right situation. It may work for easing cash flow during deals - making the interest payments, etc.. The key is to make sure to pay them off. That said, I'm not sure that I like the idea of having a bunch of credit cards floating around in my name.

Originally posted by @Tammy Parsons :

I saw the advertising for this company on Facebook and it keeps popping up on my feed.  My first impression was that this is too good to be true.  Nobody is going to extend you lines of credit for 0% for 12 months.  So curiosity got the best of me and I set up a phone call.  This is what I learned:

- They do not get you lines of credit.  They get you credit cards with the introductory 0% for 12-18 months that most major credit cards offer. (JP Morgan, Chase, Wells Fargo, Bank of America, CapitalOne, etc.)

- They ask you to pull your credit report from and send it to them.  Apparently they own this credit monitoring company and the way they pull credit reports and scores is special or something.  

- Based off of the score on your report, they use an algorithm to determine how much/many credit cards they'll be able to open in your name.  For a score between 700-750 they 'guarantee' $100K-$150K.  (I told him I have a 735, and that's what the guy told me I would most likely get funded at).

- They assign you a financial consultant and you contact this person to get cash deposited into your account or get proof of funds letters if you need them.  

- After 6 months they transfer all your credit cards into your business entity so these credit cards are not tied to your personal credit.

- Once the expiration of the 0% offers comes near, they start a second round of applications to transfer any balances you have on the first round and to increase your credit availability (they shoot for doubling, so if you started with $100K in the first round, the second round they'll go for $200K, $100K to cover the first round if you still have outstanding balances and another $100K to keep you moving forward).

- Their fees are $4,995, $6,995, and $9,995 depending on how much $$ they 'guarantee' they can get you.  So for my case, he said he'll guarantee $100K, so my fee will be $9,995 which will come out of one of the credit cards I get approved for.

- If they are not able to get you up to the 'guaranteed' funding they promised you, they will waive the fee and send you on your merry way with whatever they did get you approved for.

- The fee is good for the financial consultant and two rounds of credit card applications/approvals and managing your accounts for 12 months.  They will also teach you how to shop for credit cards so you can go out and keep building your credit lines on your own if you wish, or you can stay with them but pay the fees for subsequent years.

My $.02:

- The way they market for "Lines of Credit" is misleading, as most people know a credit card and a line of credit are two different products.

- Their fee is 10% in the case of $100K worth of credit cards, less if you are approved for more.  I'm not sure of what amounts will get you the two lower fees of $4,995 and $6,995.  Much cheaper than a hard money lender, not as cheap as conventional financing.

- Most people will not be comfortable with $100K of credit card debt on their record, let alone having to manage it...Keep in mind they help you manage this for 12 months though. 

- A concern I have is what will this do to my credit score if I'm trying to do conventional financing while these credit cards are being used at the same time...I'm a small time investor here, I'm not making millions yet and I rely on my good credit to get conventional financing.

- I like how they will transfer the credit cards into my LLC after 6 moths so that the credit/debt is off of my personal credit report, but I'm not sure how that is done and/or if it is possible to do.

- What's the difference between me paying them $10K to get me $100K worth of credit cards and me trying to do this on my own?  Supposedly they are able to get you all of this within 2 months because they have relationships with these major banks and based off of your credit history they know where to go to get you more yes's than no's.  If you did it on your own, you'll probably end up with too many inquiries on your credit report and not as much success on credit approvals and in a much larger span of time compared to them.  

Sorry for the length on this post, I just wanted to share what I learned.  I'm not sure if I'll be signing up with them just yet.  I would like to know if anybody here has used them and what they think of their program.  

Great job on due diligience. 

Thank you David! :-)   I just saw that Facebook ad, and came here to check on it.  

I spoke with a rep at Funding for Flipping yesterday. It's basically like 0% interest credit cards. You don't pay a fee to them out of pocket; it's deducted from your line of credit. For example, if you're approved for $120,000, you receive $114,000 and FFF gets $6,000. Supposedly, they only charge this fee once. After 12-18 months they help you identify the next 0% interest bank to roll your line over to. 

I just saw their ad on facebook so at least they're still around. 

Ditto for hearing about someone's experience with them.  

very informative. thanks everyone!

Thanks for all of the great info everyone has posted so far. My question is, couldn't this type of funding work with the BRRR strategy? Buy with the line of credit, rehab with the line of credit, rent it out, and then go get a conventional loan that would pay off the credit debt??? OH WAIT. There's the problem right there. I'm guessing you actually COULDN'T get a conventional loan, because now your credit is shot to hell from having $120,000 worth of credit card debt. Sound about right? Did I miss something? Any way this would actually work??? I'm all for getting cash with 0%, so if you all see some way this would work, chime in.

I have done it. Make sure that you need the money bad enough and that this is your only option. They can deliver the money they promise, but it is extremely damaging to your personal credit and can interfere with your finances. It actual cash comes to you a little bit at a time also, which limits your plans on using it. I will spare the time to write about the fees that were not in the contract; however they DID make that right by refunding some of the upfront “consulting fee”. In short… You are paying them to open up several credit cards in your name. They told me 3-5 cards. However, it ended up being SEVEN cards. They are then just coaching you how to do cash advances and balance transfers from card-to-you and card-to-card in order to get cash. These seven credit cards caused my credit score to go from the high 700’s to the mid 500’s. This triggered a negative domino effect of other issues within my personal and business finances. My own long time credit card canceled me because I was now considered a credit risk. I used that cash reward card for everything for close to 10 years, and I paid the balance to zero every month. However, that was the first thing that was taken from me and began a crash. The seven credit cards and damage to my credit then went on to interfere with my long time business line of credit. WCAP/funding4flipping/seed capital did try to help out by “coaching” me how to repair damage. They try to say that your credit score will even come up higher when all over. I went through it all. I ended up having to reach out to a real, private hard money lender for the cash to bail myself out of the credit card mess. However, when all said and done, my credit score never bounced back up. Now, most recently… some of the credit cards or “bank cards” that they opened up in my name are now reducing the limit, because I have too many credit cards (all cards that this program opened in my name). So now, the amount of cash (which is really just credit limits) is less than what they said. And because these credit card companies are reducing the credit limit…it throws of the balance to limit ratio…causing my score to drop again. If nothing else, at least understand what is happening with this “lender”. You are paying them a consulting fee to open up however many 0% credit cards it takes to reach the amount they tell you. That is how they tell you it is a “0% loan”. It is not a cash loan. These are your normal credit cards. And this company is getting you the cash by balance transfers, credit withdraws, and the % fees that goes along with each transaction. Also, know that these funds are not accessed immediately. The cash trickles in due to different credit card company policies. Some of these cards only allow certain dollar amounts at a time, and they only allow one transfer every so often. So you do not get the amount you need or promised all at one time. This program did nothing for me. It actually caused a chain of events that really destroyed a lot of my personal finances. I am still digging out of it and will be for a long time. Maybe in certain situations, this program would work. It would only be those where you didn’t need all of the money right away for a purchase and where you didn’t worry about the damage that all those credit cards will do. There are plenty of private hard money lenders out there wanting to lend money on good investment deals. You may pay a little more for them, but there is no damage done, they don’t affect your credit and personal finances, and you get the money you need when you need it. BE CAREFUL AND KNOW WHAT THIS PROGRAM REALLY DOES. 

I recently saw one of their posts on a local real estate investing Facebook page in the Orlando FL area and was curious.  Thanks to all who have provided their input.  It sounded too good to be true and I knew their had to be an angle that brought it back to reality.  I've learned all that I need to know.

Risk risk risk risk risk management. 

If you are applying for this program you probably do not have much RE flip experience IMHO, and flipping houses is stressful enough....y'all do a program like this your gonna have to apply for a xanex prescription as well

Msg me if you need help with funding. I used a company twice already with good results. They offer 0% lines of credit 9-15 months or short term loans at great rates.

Just finished using them. Currently rehabbing a project and needed to pay my guys as the loan pays construction in arrears and is often late on draws. They apply for a bunch (12 in my case) of credit cards in a personal name. Had hoped/believed they would use my LLC to build business credit score. Spoke with Josh several times, was told based on their analysis of my financial profile I would qualify for $80-$120K in lines "guaranteed probably more". In writing they guarantee $50k and wanted to charge me $8,000 for the "services". They admittedly under delivered on their verbal commitment and issued a slight refund. Still fighting. Didn't take a credit score hit as I used cards sparingly as a means of last resort.

They advertise "Imagine Having $50K-$250K Cash In Your Checking Account For Anything Your Business Needs" Josh's response to that point when questioned was: "It's very complicated, uses balance transfers. (Employee name) will walk you through that down the road." Never mentioned it again (I came to my senses/left shortly thereafter) so I can't say that part actually exists.

Lastly, they were very pushy for payment in advance. As a contractor/investor, I get paid when the job is done or when I've provided enough services per draw schedule. So I offered to pay as value add services were provided but that was not an option. That was a red flag. 

In sum: Josh is a friendly hardworking guy (can't say the same for everyone I spoke to there) but the services rendered (opening up credit cards) are far from worthwhile. DIY if credit lines are what you seek. Unfortunately from my experience, that's all they do. Hope it helps, feel free to reach out with any questions. Cheers!

I've looked into their offer. Basically, they use your credit to secure credit cars with 0% interest for 12 -18 mos. Qualify based on credit score. 50K and up funding. Money from card placed into bank account. Business cards start replacing personal cards and personal cards closed on your credit so your credit score starts going back up. The company and others like Sprout Financial, Fund and Grow and Seed Capital charges a fee for the service. Some charge reoccurring fees some don't. The best rate is one that I can't recall now which charges a one time 5% fee of amount of credit obtained. The highest is about 11% one time. That's my understanding in a nutshell. I get these type calls everytime I have used for funding.

I did some research on FundingForFlipping when I first started redeveloping homes about 2 years ago. My understanding is that they basically open up several credit cards with introductory rates of 0% for X amount of months. Then, they can roll it over to other credit cards (in your name) later with the balance transfer offers. They streamline the process and handle it all for you. However, its something that you could do yourself (if you're okay with the hit on your credit score).

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