All Forum Posts by: Justin Sheley

@Josiah Wilson The fact that I have the 29k still is really on me. I have not proactively gone after a second round. I have had some changes as far as private investors, and haven't been as motivated to go after the credit. I was carrying some debt that I have since refinanced out of when I first applied with Fund and Grow, so I think that really affected the amount I was able to qualify for. I also can do a round under my wife's name, but just have not done that yet.

@Account Closed Thank you for the recommendation, I’m actually in the process of compiling a lost of books for my Christmas present, so I’ll add that to the list.

@Eric H. I used a commercial loan for the original 30k purchase price. So I did have money tied up in the down payment and then the rehab until I was able to refinance.

@Joe Villeneuve Thank you so much for your insight, definitely has me thinking this over long and hard. @Thomas S. I like your idea about possibly pulling out that extra equity and even diversifying with that money. Although it would be hard for me not to just dump it straight back into real estate, still a very intriguing thought.

I do have to make monthly payments on them while I have the funds on the card. The rehab I just finished took 3 months, so I made 3 payments and then paid the card off. I factored those payments into my refinance.

@Joe Villeneuve Thank you for your advice. I am using a 5 yr ARM because I have already used the 10 conventional loans available to me. I am all ears, if I'm missing something there. The idea of trying to prepare for a recession because I have less leverage on the properties is because when the 5 yr ARM expires in 5 yrs, and I go to refinance the home I will owe less and therefore be more prepared to handle a lower valuation of the property if that refinance happens to occur in a down market. Does that make sense? Or in your opinion am I missing the boat there.

I just finished a successful BRRRR and refinanced the property at 65% of the appraisal. I have done this on a chunk of my properties and some are financed even lower than 65%. My bank would allow me to refinance up to 75%, but my current business plan dictates that I pull out only what I have into the property and leave the rest as equity. In my opinion this helps my portfolio stay a little more recessions proof, especially since the majority of my mortgages are a 5yr ARM. The higher equity also helps my net worth. However, I wanted to see what other opinions on this would be. I struggle with equity just being a imaginary number on my spreadsheets when I have the opportunity to put more cash in my pocket if I refinance at 75%. I know that I could use that extra money to get into more deals, but if I make that the standard for my business then I will start to have a portfolio and company that is leveraged at 75% instead of 65%. And that seems to be a bit of a riskier model. I want to make sure my company is around for the long run, but also don't want to miss out on opportunities to grow. What do you guys think?

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.

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.

@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.

@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.