– Hey everybody, how you doing? This is Seth Williams and Jaren Barnes with the REtipster podcast. We've got a awesome
conversation lined up today. We are talking with a
guy named Mike Banks, with a company called Fund&Grow. And something I think
all real estate investors can relate to at some
point in their journey is the need for money,
because it takes money to buy anything, really. And whether you're going after a multi-million dollar commercial project or a house flip or even
a smaller land deal, at some point, in some way,
there becomes this bottle-neck, where people need access to cash. And that kind of stands in the way of them doing their next deal. There's a number of different ways to go about getting the
money that you need.
Sometimes it's not as big of a obstacle as people think it is. A lot of books and articles and podcasts have been done on the subject
of how to bridge that gap, but today, when we talk to Mike Banks, he runs a company called Fund&Grow that has put together a really, really unique way of solving this problem. Basically what they do, and I'll let Mike expand
on this in just a minute, they help people get access
to unsecured business credit. And this is not just for
real estate investors, but because the RETipster podcast and blog is all about real estate investing, it is particularly relevant to what we do. Basically, we're gonna talk to Mike about how to get loans that
require zero percent interest for the first 12 months. Yes, you did hear that
right, zero percent interest. And we're gonna talk about
what kind of an investor is a good fit for this kind of loan and what it takes to apply
and get approved for it, how long it takes, what
costs are involved with it and how the system
works behind the scenes, like where this money is coming from.
So with that, Mike, welcome to the show. How you doing, man? – [Mike] Doing great, thanks
for having me today, Seth. – So, I kind of just explained the very, very basics, but
I know there's a lot more to the story of how this all works and I guess maybe we could
just start by explaining, like, is this a hard money loan or is this like a mortgage on your house? How does this loan work? – [Mike] So it's an unsecured
business credit account, so you'll have it in a
physical form as a credit card but you'll be able to use
it in any way that you want.
We have clients who purchase properties directly with the credit account and the way they do that is
they send a wire transfer using one of our vendors called Plastiq. It's a website where you can
charge your credit account and have them send a
check or wire anywhere. So it's like a really good strategy that we've found over the
years for our clients. So basically you can send a wire transfer from the business credit account that we get for you to
purchase a property.
Or you can do anything
else you want with that. You can send it to a contractor, you can send the money
to a marketing company, or for Facebook ads. But we tend to have a lot of
real estate investors who come to our program because we have
a lot of affiliate partners who teach real estate, flipping,
wholesaling, all of that. So it's a great fit. We've got clients left and right that are come through the program, investors who wanna buy
properties, and the great thing is, it doesn't show up on your
personal credit report, so you can literally apply
for a business credit card, it doesn't show up on your
personal credit report, and then you can, with
ease, send a wire transfer from your account to, let's
say, the closing company to buy a property or, let's say, to a contractor for rehab
money or whatever the case is.
So we basically help our clients do that. We set up the accounts
and we hold their hand through the wire transfer and all that. – So it doesn't show up on
my personal credit report. What is the basis for getting approved? Do you even need to see
my personal credit report? Is that part of this process? Do I have to give you
my tax returns or W2s? How does this application process work. – [Mike] Yeah, so it is credit based.
You won't have to provide
tax returns or anything else. It's really just credit based. It doesn't show up on your
personal credit report, that's correct, but the lender does want
to look at your report and make sure that
you're a lendable person. So ideally scores over 680
for the lower level results, but for higher end
results, scores over 730. Clients within 30 days
are getting on average $50,000-$75,000 within that 30 day period, and, of course, the lower
end scores are on the $30,000 to $50,000 range. Everything we apply for is zero interest, so for those people with
a higher credit score, we've got clients who
bring in anywhere from $70,000 all the way up to $150,000, within the first thirty
days of working with us, 'cause we'll apply and get you funding in the first 30 days, but we
have a 12-month membership, so we'll apply three to
four times over that period, and build up to a quarter million.
– So when you say Plastiq,
is it P-L-A-S-T-I-Q dot com? – [Mike] Yes. – Okay. And then what happens if you guys don't get approved for the loan? So if I apply and my credit score is 700, and you guys go and, on my behalf, apply for unsecured credit cards that are zero percent interest for 12 months, what's my cap, in terms
of how many I can get? Dive into that for me.
– [Mike] So as far as
how many you can get, we usually would apply for four to six each time we go to the bank and apply. We do that three to four
times over the 12 months. Three to four rounds of applications and within each one is usually
four to six applications. The only time we apply for someone is if we've pre-qualified
them, reviewed their credit, and we feel really confident that we're gonna get them
a substantial amount. We don't apply for people
that it's really questionable. We'll usually advise on pay downs. We'll say, look, you could do a lot better if you make this $2500 pay down. Or if you do credit
repair for a couple months and get that late payment removed, instead of getting $20,000,
we can get you $50,000. We have those conversations. We go through their credit
report with a fine-tooth comb. We have about a 30 to 60
minute consultation call with all of our clients
where we go over the whole funding plan and we discuss
their pre-qualification. We review their limits, their
balances, their late payments, or if they have any, how many
new accounts do they have.
We look at everything and we match that against
what the lender's looking for, so we're really accurate
when we pre-qualify people and so we don't just apply blindly. And also, the way that we
ensure the maximum approval is through the relationships
we have with the bank, because everyday we're in
contact with the lenders that we work with, and we're speaking with a
decision-maker at the bank and we're making sure
that each application is reviewed by a human being. So it's not just a
computer automated system that you're running your
application through, and that's what happens when
most people apply on their own, it's just all systematically done. And sometimes, the computer
will systematically deny you, when in reality, you
actually qualify for credit. So what you need to do is
get someone to review that and it's a lot more
difficult than it seems, but for us, it's a lot easier for us to put those applications in review and say, hey, this $5000, it's not enough, this client has great credit, they need at least $50,000.
A big part of where the
additional credit comes in is through that process where we speak with our contacts at the bank, and we make sure that
each account is approved at the largest amount. So we don't just apply 15
times and cross our fingers and see what sticks. We apply four to six times and
we follow up very diligently on each application. We speak with our contacts at
the bank who make the decision and we make sure that each
application's approved at a substantial amount
based on their credit.
– So is that hitting my
credit score four times or do you pull one report and
then give it to all of them? How does that work? – [Mike] Yeah, they're each gonna pull. So there'll be an inquiry from each bank. Each inquiry is usually
two to three points and a business inquiry could be removed. So we coach our clients on
how to remove the inquiry after we apply and set up
the business credit account, because the business
credit account isn't going to report onto your personal report, so you can get those inquiries removed. So we show our clients how to do it and then we also take it a step further and we do it for some clients who want to pay an additional $250 fee. We'll do their inquiry removal for them and send out the letters and dispute them and usually 85% of the inquiries come off, and like I said, they're only
two to three points each. Once you've got that account open now, you've got $50,000 or so
in zero interest credit.
It is worth taking that two
to three point inquiry hit and then later on having it removed, and then a few months
later, we can apply again, and repeat the process. That's how we get clients up
to and over the $250,000 mark. – Was I understanding this right that literally all you
need is the credit report? Like, you don't need
any income verification? – [Mike] Well, as far as
sending in tax returns, you don't necessarily need tax returns, you don't need to send in financials. They don't request that. You still have to be accurate
with your income, obviously. – So you do have to tell
them what the income is, they just don't have to verify it.
– [Mike] Right, exactly. The last year annual income
and your household income and when we call and we speak
with the decision maker, the underwriters at the bank,
who review each application, we also disclose any projected income. So if a client thinks,
hey, if I get this $50,000, I could do another two deals a year and make another $50,000 a year,
here's my projected income, then we can disclose that over the phone. But when we apply, we always use the accurate income figures.
– So I can include the money
I make from selling drugs because that doesn't have to
go on my tax return, right? – (laughing) – [Mike] Um, well, I'm not an attorney, so I couldn't advise you on that. (everyone laughs) – Eh, that's disappointing,
but thanks for nothing I guess. – We'll have to keep our
side business separate, Seth. (everyone laughs) Just for a disclaimer, we
do not sell drugs, guys.
– It was a joke, everybody. – Yeah. So I wanted to ask you, Mike, what does it look like
practically, on the back end? So let's say I go round one,
I get approved for $50,000, three months later, round two,
I get approved for $50,000, is it all lumped into one
account and I have a username and password and I log
in with a routing number and a checking number and then
I transfer it out that way? What does that look like? – [Mike] So, with Plastiq,
you can set up an account and then you can add your pay to vendors. So let's say you want to send a wire transfer to a closing company, then you would add them
in as a pay to account and then you would just
send the wire transfer and then Plastiq would
charge your credit card.
They charge you at 2.75%, but
you're able to, let's say, take $100,000, send it
to the closing company and buy an investment property
and so it's zero interest, it would only cost you
the 2.75 on that transfer, so it would be $2700 and
you've now bought a house cash and you have it zero
interest for 12 months. As far as how many accounts
we set up and how that works, they're gonna be separate accounts. – So I would link all of
the credit cards to Plastiq and then from Plastiq, I would be able to see a total balance and
then transfer that out. – [Mike] Yeah, exactly. So there's gonna be a few credit cards and we can merge some of the accounts. For example, Bank of
America has two credit cards that we could apply for and then merge them
together down the road, but in reality, you're gonna
have some credit cards. If you do the math, I'm saying
we're gonna usually apply four to six times, do
that three to four times over the years, so if
we do it three times, you're at about, let's say, 18 accounts.
Some of the accounts, you're
gonna obviously roll over into the new ones after
the zero interest expires. After that, of course,
the interest rate goes up to about anywhere from 12
to 16 percent on average, but it could go up a
little higher than that. But we're seeing it,
for most of our clients, it is around 12 to 16 percent
is what the rate goes up to after the zero interest. But again, this isn't a
loan, this isn't a mortgage, this isn't something you're
gonna sit on forever.
If you're doing flips,
you're trying to get it done in 6 months, and if you can do that, you've done it all at zero interest. And if you compare it
to a hard money loan, a hard money loan on $100,000,
you're looking at $15,000, depending on the interest rate. Could be $10,000. – So after the 12 months, can I just apply for a new interest free credit card and just not use an old ones? – Take out the first one with the new one? – [Mike] Yeah, you can
do that, definitely. You can apply, maybe let's say, this year and then use that card for a good year and then you can close it out and then you can reapply
for the same account and get it re-approved with the same bank. – Is there any cap… So I'm looking to move
to Northwest Indiana and let's say I wanted to get a duplex and do a flip and hold kind of thing, where I'm like, you know, I live and flip. If I'm looking at a purchase
price of, let's say, $100,000, for easy numbers,
and a $50,000 rehab, if I came to you and I said, hey, I'm trying to get $150,000
in the next six months, you guys could walk me through the process to pretty much get access
to that interest free for 12 months? – [Mike] Exactly.
We just had a client, this
isn't our usual result, but a client just went
through with his spouse and we applied for both parties,
for the husband and wife, and they got $280,000 within
the first application round, within the first 30 days. So when you bring in
your spouse or partner, you can get even more
funding in the short term. But yeah, $150,000 over six months, that's not unlikely at all.
And we've actually gotten some
clients $150,000 on their own in one batch in the first 30 days. But on average, we're
usually seeing between $50,000 to $75,000
within the first 30 days of working with us. And so if you bring a partner, you can get the money even faster. – Mike, I know if you
go past the 12 months and if you don't somehow
refinance the original loan, you said it was a 12 percent
or higher interest payment that you'd then have to start making, in the meantime, though,
what kind of monthly payments do you have to make? Since it's zero percent, that
doesn't mean no payments, that just means the payments
don't go to interest, they go right to the balance
of whatever the loan is.
So what is the minimum
required payment per month during that first 12 month time frame? – [Mike] It's 1% of the
balance that you're carrying. So if you've got a $10,000 balance, then you'd just pay the 1%. That's your minimum monthly payment. So 1% of $10,000 and then
if you want to pay more, you could do that, of course, but that's how the minimum payment works. – Okay. So if I decided to take this money and go to the casino,
as long as I do well, I should have enough to
cover the payment, right? – Man, drugs, casino. – [Seth] Because it usually goes well. – Man, what did Mexico do to you, Seth? (everyone laughs) – [Seth] Not a bad thing. (everyone laughs) – Okay, alright. That's really helpful. Man, so when you were
talking about how this couple got approved for, I
think you said, $280,000, in a situation like that, if
somebody applies for a loan, they get access to that money,
they max out all the cards and spend all the money on
whatever it is they're gonna buy, and then when it comes to 12 months later, when they want to apply
again for a new loan to take out the original
one, they will have to look at the credit report and
that credit report will say, hey, this person has
maxed out credit cards in the amount of $280,000.
Would that not be a red flag
that would prohibit them from getting approved
the second time around or are you able to communicate, look, this is why the balance is so big, because they were planning to pay it off with the loan they're getting from you. Like, do you communicate that to them or does that ever get in the way? – [Mike] Yeah, that could get in the way. We don't want someone to
go through the program, get $280,000, spend that money on whatever and not create some type of
return in that short term. We don't want them to
just get $280,000 of debt and then not, like you
said, if they're maxed out, it is gonna be more
difficult to get more credit. So the idea is to pay down a bit before we go back and we apply.
Now, if we're applying for
strictly business credit, it doesn't actually show up on
their personal credit report, so it doesn't affect
their personal credit, DTI, or any of that. Their personal credit will stay at 800 now that they're using business credit. A lot of investors are using
their person credit anyway, so if you start using business credit, you keep it off your personal
and keep your scores high, but at the same time, we
want you to invest wisely. Buy a house, put some
money into it and flip it. This isn't exactly long-term financing. This isn't for a rental property. However, you can buy a rental property, fix it up, get it appraised,
put a tenant in it and refinance that property into a long-term investment mortgage. After you've now had the ability to purchase a distressed property, cash, because you have access to the credit. So yeah, we can't just go in and say, oh, we could just max these accounts out. They don't show up on my
personal report, it's all good, Yeah, we could do that
but not for long term.
You could definitely leave 'em maxed out for however long you want, I'm just saying let's go in wisely with
this and not go 12 months and still have all the debt there when the interest is
about to start hitting. – Why exactly do lenders even do this? What's in it for them to give
a zero percent interest loan for 12 months and then it get paid off? Are they just hoping that people don't pay 'em off in 12 months? Is that the only way
they would make money? – [Mike] Yeah, I mean, there's a lot of zero interest offers,
personal business credit.
They've just been doing that for years. That's probably a great
way to get clients. They're giving people free credit and saying, here, you've got 12 months. Let's see how it goes. And a lot of people rack up debt and end up having to pay money on it. We're trying to use this in a way that is obviously going to make us money.
We're gonna use it to our advantage. Yeah, we want to work with the bank, but we don't necessarily
want to pay the interest. That's what the bank's
hoping that we're gonna… They're gonna be gaining an easy client by giving that teaser rate and then establish a relationship that turns into them
receiving interest payments. – As somebody who worked in
the banking industry in 2008 when everything came crashing down and banks just decided they weren't going to lend money anymore,
what happens if somebody gets a couple hundred thousand
dollars of these loans and then another 2008 hits and they can't get their mortgage to pay it off, or they can't apply and get
another one of these loans, is there a way to safeguard against that to make sure that doesn't happen? Basically, would it be wise for somebody to not even consider this unless they're really, really confident they're gonna have some
other source of funds to pay it off in the first 12 months? Do you have any advice
or suggestions on that? – [Mike] Yeah.
Just like with a hard
money loan, you can't get a hard money loan unless you
can afford the payments, right? Just like this, if you're
going in with a flip in mind, six months, 12 month flip, whatever it is, you have to be able to support
the payments on your own and hopefully that's a
good deal that you chose, so that you can fix it up and
sell it in six or 12 months and then you can get your
money back plus your return. So you can't just default on it. It'll come back onto your personal credit if you do default on it, and
just like any other loan, there's gonna be repercussions to that. It is unsecured credit, so the house isn't directly
collateralized by this funding. So technically it's a
cash purchase on the house but now you're in with
the bank, whatever money that you're unable to
pay for whatever reason. Let's say you get locked up
because you're a drug dealer and you can't make your
payments on your flip anymore, then yeah, you're kind of screwed.
Your credit's going to be tanked
and that's all we've seen, but I guess it could be
even worse than that. You could lose the property, they could come after you
personally if they choose to. But usually they just charge off-debt. – So, I wanna go back to something that you guys said originally that I just need clarification on. So, I thought originally we said that when we were
applying for these loans, that they don't hit our credit,
or something to that effect. – [Mike] They don't show up. – So if they don't show up, why are we getting credit inquiries and then why are the loans in our name? – [Mike] Personally guaranteed.
So they're personally guaranteed. They check your credit report, but there's no reporting occurring. So business credit accounts
report to your EIN, not to your social. So it literally will not show
up on your personal report. The inquiry will, though. So when they run your
app, they run your credit, boom, there's the inquiry. Alright, let's see if
this guy is credit-worthy. I need to look at his personal credit.
It's all credit-based, it's unsecured. It's just basically a
business credit card, so it's a pretty easy approval process. Like we said earlier, we don't need to provide a bunch of
documentation or financials or proof of income or anything like that. It's all credit-based. – So just to clarify, if I
have $50,000 out with you guys and then I go and I apply for a conventional mortgage for a house, when the conventional banker
looks up my credit score, are they going to see a $50,000
unsecured loan in my name? – Not your personal report, right? – [Mike] They won't see it
on your personal report.
– [Jaren] Okay. – [Mike] Correct, so it
depends on the bank, really, because some banks are pulling your business credit report as well. – Yeah, we used to do that
when I was in banking. It's pretty normal. – [Mike] Yeah, so it really depends, but that shouldn't effect… I guess it could effect, if
they're pulling on a mortgage. But, yeah, these are
tough questions, guys. – (laughs) Sorry. I just really want to come
at it from all angles, because I see a really
massive opportunity here for our audience. Guys who are listening, what you could do with
something like this, very relevant in land, is
you could get a 25, 30, up to 50 thousand dollar loan, go and buy a bunch of small properties that you intentionally try
to sell via owner financing and then the accumulated
month-to-month income, you could just use 100%
of it to pay down the loan and then you're paid off
in, like, six, seven months, and if your notes are out for 36 months on your owner financing deals, then you could literally,
for zero money out of pocket, just set up massive amounts
of month-to-month income.
It could be a really huge opportunity, so that's the reason why I keep
trying to poke holes in it. I'm like, dude, this sounds
almost too good to be true, because if it is what you're saying, it could be a big game-changer. – [Mike] I don't personally
have that much experience when it comes to the application
process on a mortgage and how this has affected those
clients that have done it. I don't have that data so
I can't really answer it, but I know we have an
affiliate, Clayton Morris who sent us, like, 500
clients since last year, and we've done, like, $35
million for his group, and all they do is buy
rental properties from him. Like, a lot of these people that he's sending to us
are first-time investors who are trying to get their first rental, and that's the game plan. Buy the first rental with the credit and then re-finance it into a mortgage, an investment mortgage.
But I haven't had someone who had… I haven't seen someone who
had $280,000 worth of credit try to get a mortgage,
you know what I mean? I know clients are using
this to buy properties and then re-finance into a mortgage. I don't know if all those clients were fully maxed out at that
point, you know what I mean.
– I've never worked in the
home mortgage industry either but I think if the mortgage
amount is low enough, they would… Again, I don't know for sure, but… – [Mike] It's all about the payment. – Yeah, I mean, they would not be pulling a business credit report if
it's a small enough mortgage. Like, that's not really even part of it. It's just, they'll look at the personal and it wouldn't show up there. So that's my understanding. – [Mike] Yeah. If it's a smaller mortgage and their income could easily support it, then they probably
wouldn't worry about it. But if it's, like, a $300,000 mortgage, they might be really checking and making sure your income
can support that payment on top of the business
credit debt that you've got. – I actually experienced that because every house I've ever lived in has been pretty small mortgage size. When I moved to this current
house that I'm in now, it was closer to that $300,000 amount and that was new to me.
They started looking into,
like, my business stuff and business tax returns
and really picking it apart a lot more than they did for
some of the smaller mortgages. So, yeah, that's a good
thing to keep in mind if you're gonna be going in
that direction in the future. – Yeah, I know, too,
that if you have to… If you're self-employed, you're not a W2, they have to pull a lot of stuff from your business side of things.
– [Mike] Uh-huh. Yeah. – Now, did I, I heard you say, Mike, you do have to sign a personal
guarantee with these loans? Is that right? – [Mike] Yes. – Okay. So it sort of is secured, it's just not secured by a physical asset. It's secured by you saying, I promise I'm gonna pay this back and you can come after me if I don't. Is that right? – [Mike] Yeah. – Okay. I think one of the huge
benefits I see to this, especially when I think of this through the lens of land investing, is that conventional financing is basically impossible to get for land unless you're planning to
immediately develop it, which many people are not. So whether it's you as a land investor buying vacant land properties… Personally, I don't know that I would really feel comfortable
going into a bunch of debt to do that, but if I was,
and if I was really confident I could sell 'em quick, this
would be a great alternative.
Or at least a viable alternative to partnering with an investor
who's giving you the cash and then asks for, like,
half of the profits from you. With this, you basically partner with whatever the lender you
find through Fund&Grow and just maintain a lot more control over the funding piece of it and keep a lot more of your money, assuming everything
goes according to plan. Or on the selling end, I know, too, again, for people who buy our properties, it's very, very difficult,
if not impossible for them to get a
conventional mortgage loan to buy any piece of land, but they could use something like this to get the financing and buy it.
And in terms of what their
back-end strategy and plan is, it's kind of up to them as to
how they're gonna handle it after the first 12 months, and
how they're gonna pay it off, but it would at least give them
the liquidity that they need to purchase it from you as the seller. It loosens things up a lot
more, and say if you don't want to deal with seller financing so much, which there's certainly
some benefits to that, but it's also kind of
annoying in some ways, too, if you just want to get your cash, this could be a viable
way to present this kind of financing option as an
alternative to seller financing. – Yeah, I'll just chime in there, Seth, I know that, even if, after 12 months, all I was paying was somewhere between 12 and 24 percent interest, right now I'm paying 40 to 50 percent for my private money that I'm using. So that would be a huge
savings even if I just did it and then kept them after 12 months.
– Yeah, well, a lot of
seller financed deals, I would charge 10% minimum
for the monthly payments, so it's not that far off. Yeah, that's really interesting. My understanding is that
this is basically set up like a membership with Fund&Grow that costs $3997 per year. And by the way, if you
guys listen to the end, I'll tell you about a
special way you can get a $500 discount on the
membership through RETipster.com.
But I'm just curious, why
does it cost this much? Where does that money go? And why is it okay? Why is it still better than
getting a hard money loan or some other source of financing? – [Mike] Well, it's a 12
month service that we provide. It's a 12 month membership, and we do all of the work for our clients. So, as far as setting the account up, making sure it's approved
to the largest amount, and then walking them through
the set up with Plastiq so they can send their wire
transfers and all of that, so there's a lot of labor that goes on, a lot of consulting that
we do with our clients.
We charge $3997 regularly. We have a $500 discount in place. It's push payment plans as well. Now, what was the other
part of your question? – I mean, I already kind
of know the answers. It's kind of obvious in my head, but if people aren't putting
it together themselves, with those costs, why is that
still better than working with a conventional lender
or a hard money lender or finding some other source of financing? – [Mike] Well, I don't
know about you guys, but I don't like answering to anybody.
I like doing my own thing,
so when I have access to my own credit, I can do that. I don't have to always get
approval from a lender on a deal where maybe there's a thinner margin, but it's still a deal
that I know I can do. Maybe it's a lower, smaller investment and a lender doesn't even
want to get involved on it, I can do those deals myself. Or I can spend that
money on marketing costs. I know you're talking land deals. I'm sure you guys are… I'm not sure, but maybe you
guys are doing direct mail to get some of those land deals? – Mm-hmm. – [Mike] That stuff costs money. I also do direct mail. I do some real estate on the side and having access to credit allowed me to, even though I've got money
in the bank and all that, I'm still kind of not
wanting to just spend money. But having access to
credit at zero interest has really made me feel
like I can just spend more.
So I've been putting
out more in direct mail. You can do anything you want
with it, so you're not limited. With a hard money loan, you're limited. You have to answer to
somebody and also the cost. So breakdown $100,000 loan
with 12% interest, hard money, with two to three points up
front on the money, right? – [Seth] Yeah, that's expensive. – [Mike] Or maybe 10%. It could be 10 percent interest depending on how experienced you are. Also, usually you have to have experience to get a hard money loan and if you don't, then you're definitely paying top dollar. – If they even will lend to you. – [Seth] Why would you do a
hard money loan instead of this? I know Mike probably is not
the right person to ask. – He's like, never! (laughs) – [Mike] No, but you would, because let's say it's a $200,000 flip and you've only got $100,000 in credit, you definitely want to go still
and get the hard money loan, but you might need a good
30% or 20% to cover the gap.
You guys know what I mean? Because they don't always
want to cover the full cost. – [Seth] Yeah, on a down payment. – [Mike] Sometimes you
gotta come out of pocket on a down payment, right? So it comes in handy for those of you that are in the higher-end markets. You might be thinking, aw,
this isn't gonna work for me, but really, you could be
using this for marketing, for travel. We get free travel. Ari just took his family,
the CEO of the company, they went to Barcelona,
flew there completely free, first-class, would have been, like, almost $10,000 or something like that, but you get free travel,
you get rewards points, you get cashback. Every quarter, you get,
like, 1.5% cashback.
It's a decent amount of money. It's a couple grand, depending
on how much you're spending. So there's different benefits. So the hard money loan,
maybe for the bigger deals. The $100,000 range you
could literally use this to fund the whole deal,
or you could just use it to pay your contractors. I have a lot of clients
who are just like, no, I love this because I can just
pay my contractors with it and that's what I use it for.
Some people they're trying to make it work for the whole deal. It's just another tool to
have in your tool belt. We deal with a lot of clients every month. We do about $8 to $10 million dollars. We set up $8 to $10 million dollars in new credit every month and the majority of those people
are real estate investors, flippers, wholesalers,
beginners, seasoned, so there's definitely uses for it. It's not your long-term fit necessarily, but it's definitely a
good alternative to cash. – Yeah. And I think when I was working in the banking industry, I
exclusively did SBA 504 loans and I gotta tell you, even
going through a normal, conventional lender, it
is kind of the way to go for long-term financing, but
the obstacles they throw up and put in your way to get in
your money are unbelievable.
An SBA is, like, twice as bad
as a conventional lender is, so it would take months. And as the person who was
handling the application, I just wanted to rip my
hair out every single day, because it was… I'm just amazed how hard
it was to get the money. Having something like this where 30 days, or maybe even less, to
you get your approval and there's nobody
standing over your shoulder telling you what to do with it, and the zero percent interest thing, and the all-in cost is a lot less than a lot of other stuff
that I've seen out there. I don't want to say it's
a one-size-fits-all thing, but for sure, like Mike was
saying, what an awesome tool just to have at your disposal
if and when you need it. – [Mike] Real quick, even if
you have bad credit right now, this is still something
that could work for you, because we have a credit
repair company that, it's a separate company, but they are extremely
effective and aggressive, so if you've got a BK, we've
removed BKs four years early, before they're supposed to come off.
If you've got judgements
or liens on your report, those shouldn't even be
there at all anymore. Late payments, a lot of
these things can be removed and so a lot of clients sign up. About 30% of our clients
come in the door with us and they need credit help. So we have, like I said,
the credit repair company that we own, we work together with them. We literally will communicate
together with the client, making sure that their
credit is being enhanced as quickly as possible and
then we're able to apply and get them business
credit once that's done. That's potentially still a fit
for some people on the call. Some people might just want
to do credit repair first, but I just wanted to throw that out there. We can help people, even if
you're not qualifying right now, we can get you to where you need to be so that you do qualify. – And actually, I was going
to mention this earlier, that kind of service is
actually not the norm, in my experience anyway.
A lot lenders out there,
they can sort of tell you what the problem is, but
they're not gonna coach you through how to fix it. It's more like, nope, you're just denied, sorry, you're on your own. To have somebody who can be your advocate and really give you, frankly, wise guidance on how to fix issues, getting $50,000 instead of $20,000 with just a few small tweaks
that are very achievable, just understanding that
and having somebody there to explain it to you
and come alongside you and just get you through the
process, that is worth so much.
So the fact that you get that kind of help along with this process… I mean, probably not everybody
needs that kind of help, but if you do, there's
actually somebody there to usher you along. Mike, this is just purely curiosity, but for people who do not
use this for real estate, what are some of the more common
uses for this kind of loan? I know you mentioned a few random things throughout the conversation, but what other types of businesses employ this kind of credit
and what do they use it for? – [Mike] We've had doctors,
we've had attorneys, we've had truck drivers, we've had all kinds of
different businesses. So there's really no limit. Amazon resellers, tons of marketers. Any business you could think of. We've had people who are
in the music industry. There's no limit, really. You can do anything you want with it.
You can grow any business,
start a new business. We've had franchises. I work with a franchise consultant who would bring me leads
who were looking for money for their franchise, to
start their franchise. We've had a lot of different relationships and all types of clients. We have literally over 400 reviews. You just go online and
Google Fund and Grow, you'll see tons of
reviews on our GooglePlus, on our Better Business Bureau. There's tons of threads on BiggerPockets. There's lots of examples of people who've gone through the process. On our YouTube channel,
we've got videos, too. The skeptics that are thinking, hey, this sounds a little weird. There's a lot of people that are doing it and it works. We've done over $450 million. We're on the Inc. 5000 list
the last three years in a row and we have a stellar reputation. So I just wanted to throw that in there. For those of you that are curious, you should check us out online as well. – RETipster does have a referral
partnership with Fund&Grow.
As I referenced earlier, that $500 discount you can
get on the annual membership if you decide this is something
you want to check out. If you go through our special link, it's RETipster.com/fundgrow. RETipster.com/fundgrow. F-U-N-D-G-R-O-W, all one word. You'll go to a landing page where, if you go through that
and sign up through that, you'll get this $500 discount
on the application fee. We get a small kickback
for referring new borrowers to the organization. I'm gonna have that discounted link in the show notes for this episode, so it'll be in the
video as well on YouTube in the show notes.
Again, RETipster.com/fundgrow, and I encourage you guys to check it out. We'll probably be doing, I dunno, just because I think it's
a super-relevant issue for pretty much every
real estate investor, we'll probably be doing a webinar
or two in the future, too, – That's so funny, I literally
just wrote that down. I'm like, we need to
do a Fund&Grow webinar, so I'm with you 100%, yeah. – It's a great way to
explain all the details. Is there anything else
that we have not covered? Like, obvious points? – [Mike] Oh yeah, I wanted
to throw in the fact that we'll set up an entity for people, so if they don't have one right now, they're a new investor, we'll
set up an entity for them. – Like an LLC? – [Mike] That's just
another added benefit. – So like an LLC to have
some asset protection, or what does that look like? – [Mike] Yeah, we set those
up for our clients for free.
If they ask for an LLC, we
connect them with our partner who will set up an LLC for them and then talk to them a little bit about real estate trusts
as well, and series LLCs, which are, I dunno if you
guys are interested in that, but he might be a good guy for
you guys to talk to as well. His name's Scott Smith. You know him? – [Seth] Was he, I think I heard him on BiggerPockets a long time ago. – [Mike] I think he's an attorney as well. – Because I remember he was
talking about Series LLCs and stuff, and it was the first
time I'd ever heard of that and I was like, man, that's brilliant.
I think I do know who
you're talking about. – [Mike] Yeah, he seems like he's got a lot of good info on entity structure and he came as a referral
to me from Clayton. – Yeah, we had him on
the podcast, actually. – [Seth] Mm-hmm. – [Mike] Yeah, he's awesome. – Anything else, Mike, that we're missing? Any other big things
people should know about? – [Mike] We have a 60 day refund period. – [Jaren] Oh, wow. – [Seth] You mean, refund
of the membership fee? – [Mike] Yeah, so if they sign up now or if they sign up on a webinar and it turns out they need the money and their credit's not good enough and we can't apply as is,
they get their money back in the first 60 days. And we give people their
money back in general, like if someone's three
months out and they're like, oh, you know, I can't
stick with credit repair, I just gotta back out, we'll give them their money back. That's why we have no complaints online. – [Jaren] That's awesome. – [Mike] Yeah, that might
be a good thing to add in.
60 day unconditional money-back guarantee. – So Mike, if I wanted
to literally get started right after this interview and I go ahead and I click on the link in
the description box below or the show notes, what's the
process gonna be from there? Am I gonna actually be
coordinating with you or does the fill-out form
connect me with the rep? And what's the time frame in terms of when we get the ball rolling? – [Mike] So usually on
the podcast, we offer…
The call to action is directly to our pre-qualification opt-in form. You choose your credit score range and then you see a short
video and then after that, you'll get access to the webinar. With that, that's how we usually
do it when we do a podcast. Once you do that, we'll have
somebody from our office give you a call before
you sign up or anything. They'll just give you a
call to go over the program, go over your credit and all that, and see if you're interested. And then from there, you
can do whatever you want, sign up or just take the info
that you get from the call and maybe apply it to your credit somehow. So that's what would usually happen.
We would call to action to
the pre-qualification page and then have someone
from the office call them. – Is that a 48 hour time
frame, 72 hour time frame? Typically, what's that look
like for that call back? – [Mike] Usually within
48 hours, just to be safe, but usually pretty quickly. – Yeah, I'll have links to both, just a normal landing page
and also the webinar page, which, again, has not been tailored for the RETipster audience,
it's just a standalone, general webinar from Fund&Grow, but you can get to the
webinar landing page at RETipster.com/fundgrowwebinar. RETipster.com/fundgrowwebinar. And again, I'll have that
link in the show notes for this episode, which
is RETipster.com/35.
Well, Mike, I really appreciate
you taking the time to come and talk to us and talk
to the RETipster audience. I got a lot out of this. I'm sure, I know there's people out there who can definitely put this to use. Again, it's not for everybody necessarily, but, man, I can't tell you
how many emails I've gotten over the years from people
just asking about, like, what's a better way to get funding, how do I solve this problem? Please help me.
And I always give 'em these
solutions that kind of work. They're kind of annoying,
but it's a way to do it, but this is probably the easiest way that I've heard of so
far, just in terms of cost and speed and all that. – And just for the audiences listening, I'm actually gonna be a guinea pig and I'm gonna sign up
right after this interview and I'll let you guys know,
either in the Facebook group or, if you're an RETipster
club member, within the forums, what my experience are.
Maybe, I'm not committing,
but I might come out with a blog post sometime down the road to document my experience. – Yeah, that would be really cool, if you end up doing that, Jaren. You should totally do that. Well, Mike, again, appreciate it. We'll have links to
all the Fund&Grow stuff in the show notes. Again, RETipster.com/fundgrow,
for just the normal website, and fundgrowwebinar if you
want to see the webinar and get all the information about it.
So, yeah, thanks again,
Mike, appreciate it, and hopefully we'll talk soon. – [Mike] Yeah, thank
you guys for having me. – [Seth] You bet. – [Jaren] It's been a pleasure. – [Mike] Talk soon. Bye. – That's pretty cool. What do you think about that, Jaren? – I'm literally, right
after while we were talking off the air for a minute there with Mike, I went ahead and signed up. I don't know what the process
is going to look like.
I don't know what we're gonna do, but I'm gonna take a lot of notes as I walk through the
process and probably come out with some kind of a
blog post down the road, because if this is real,
this is a game changer. Hands down. – Yeah, for sure. And as we've mentioned before, we do have a referral
partnership with Fund&Grow. I don't want that to
get in the way, though. I'm not trying to pitch people on this or say, you need to do this,
it's what's best for you, because I don't know that. I don't know your situation. I can't make those decisions for you. I'm not a financial advisor or anything. I just think it is a
legitimately useful thing to know about. I would let you know about it even if we couldn't offer you a discount, because if you just do the math, it doesn't apply to every situation, but if you need short-term financing and if you've got the back
door plan of how you're going to handle things within 12
months, it's just way easier and makes a lot more sense
than a lot of the other short-term financing options out there.
Hard money loans, borrowing
from your family… Things can get really
messy and just sticky with a lot of those
short-term financing options. But this just seems like
a pretty solid thing just to have in your back pocket if it applies to your situation. For that matter, if
you're listening to this, if you're selling properties
or buying properties, whether you need this kind of credit or you know of somebody else who needs it, keep in mind this $500 discount applies to everybody who uses it. Feel free to share that
RETipster.com/fundgrow link with anybody that you think might need it. Hopefully it's helpful
to somebody out there. – I think you kind of
hit it right on the head. I really love your heart,
man, and I can just reiterate that I have seen you do
that countless times. We push a lot of people to AgentPro247 and we don't actually make
anything from all that, so I just want to reiterate,
guys, just 'cause we have a referral thing set up
with them doesn't mean that we're giving preference to them.
They literally seem to be
a really solid resource. I do say seem because I want to walk through the fire before you guys do. Obviously, if you want to
roll the dice, of course. And it does come fully endorsed by some pretty high-level guys and influencers in real estate, so it seems like it's really promising, but I'm gonna walk through it
and I'll let you guys know. – And that's also another
thing worth mentioning. I don't want people to take
this as an endorsement, per se, because I have not used it,
Jaren has not used it yet, this is more based on
just what the product is, how it's presented, and also, just a lot of very credible people who have thrown their name behind it.
And if you look for reviews on it, a lot of people have had really
good experiences with it. The thing that makes me
a little nervous is just having lived through the
most recent Great Recession. It was just crazy what
was going on with lenders. Like, some banks were just like, nope, we're not lending anymore
to anybody for anything. It's like, that's how banks make money.
Why would you just stop that? But banks were just
doing some stupid things because they got hurt so bad, and so credit markets just froze up. I would just say, if you do this, just be really confident
in your backup plan. Don't try to use short-term
financing long-term and have a plan b. If your first source of take
out financing falls through, don't have all your eggs in that basket. Have other alternative
places you can go to to get that kind of money. Preferably from selling
the asset that you bought. – Yeah, man, and I think that
goes for all of leverage. The only way debt makes
sense is if you're going to use that debt to go
and make more money. That's the only time it ever makes sense. If you are not an entrepreneur and you are not somebody who has…
There's no foolproof
ways of doing business, but if you have… I've been doing land for, I dunno, two, two and a half years now,
and so I know, at this point, I can buy X amount of property, that it's going to sell within three to six months, worst-case scenario, and I know that if I
did something with this, I'd be able to pay it off.
And I have some things in cash reserve, that if I got into a pickle,
I could pay things off. You wanna be wise in what you do. Don't use this to go buy a brand new TV. That'd be really, really, really dumb. (laughs) – And it would be a huge TV
if you spent $25,000 bucks. (they laugh) I was with you, Jaren, though, I was still trying to
wrap my mind around, like, so you need my personal
credit report to do this, but the loan doesn't appear
on my personal credit. I was trying to figure out why and how. I guess I understand it, it's just not how I would have
thought that it would work. But I guess in most cases,
it's to your benefit that it works that way.
Yeah, I mean, I think if you're wise, you wouldn't use that to, like,
manipulate some other lender into getting what you want,
but it is just kind of nice that it's potentially one less obstacle that gets in your way when you
need financing in the future. I don't know of any other company out there that's doing this. I'm sure they're out there somewhere, but I've never heard of
another one like Fund&Grow that offers these kinds of
financing solutions for people. If I had, I would have
mentioned it by now, but this is the first
time I've ever even heard about this kind of concept. Back when I was in the banking world, I never heard of this kind of thing. It was pretty common
where we would come across people where they either needed a little bit more cash
for their down payment or there might have been
an oddball portion of their overall financing project
that they could not finance through our particular kind of loan, so they had to find some other source to take care of that part, but in a lot of those situations, this would have been perfect for them.
Again, assuming they have some
kind of take out financing waiting in the wings at some point. But the ability to move
quickly and have flexibility and not have somebody
with a ball and chain around your ankle
everything you try to do. It's a pretty huge benefit. – Just learning about Plastiq alone, that you can take a credit card and then convert it almost into cash, that is a big deal. – I know. – That's a huge deal. – Yeah, we'll have to link to
that in the show notes, too, just to make sure people
can learn about that, if they're just interested
in that kind of thing. – Before we jump off here, Seth, I want to mention, I kind of like that we're doing these outros. I think we did last
episode and this episode. Maybe we should give it a try to, maybe after every interview that we do, just have an extra 10, 15 minutes where, if people want to skip past it and not hear my annoying voice, they can, and they can get the meat of
the content in the interview, but maybe at the end we
can just jump on here and just kind of do a
little bit more free flow.
– Yeah, man, I like it a lot. It kind of just gives me a chance to process what I just
heard in the interview. If there's things that… Because sometimes things are explained that are pretty simple but my slow brain can't understand them. I dunno, just kind of bounce
'em back and forth with you. Maybe you can help me
put the pieces together. We can both just talk
about our initial thoughts on what we talked about. Yeah, I think it will be helpful and hopefully somewhat
entertaining for people, just to hear more about
what we're thinking. – And maybe it's a little
bit of a chance to… I don't really actually have
any hair because I'm bald, but if I, metaphorically
speaking, if I had hair, I could let my hair down a little bit and just share my heart with
you guys a little bit more. – Yeah, totally. Well again, for those who are
listening or watching this, thanks a lot for spending
your time with us.
Really appreciate it. The show notes for this
episode, RETipster.com/35. And you can see links to all
the stuff we talked about. Whether this applies to you today or not, there's a good chance
it'll probably come up at some point in your
life if you're aware of it and if you know that it's
there for you to use. Yeah, it's just a good
thing to keep in mind and I hope for those out
there who do need to use it, they find it really helpful. Thanks again, everybody for joining us and we will talk to you next time..