I just closed on a duplex with a conventional mortgage loan, and I used Fund & Grow and Plastiq to wire part of the downpayment. This was the process for me:
- Secure sufficient business lines of credit through Fund & Grow. I received about 60k of available credit in less than 30 days. (16k within the first week). I have a great credit score, good stated income, and about 50k worth of personal credit to my name already, so it was relatively easy to get approved. Just be sure to be available while they're talking with the reps at the credit card companies because sometimes they'll send you a string of numbers to confirm your phone number etc.
- Set up a Plastiq account. Once you have the desired amount of business credit for the downpayment and have activated the cards, upload the card(s) that you'll be using to Plastiq, ( preferably Visa for real estate from what I'm told ). Next, set up the ability to send wire transfers. This is important since you'll want to wire the funds to the title company instead of the tradition check in the mail which can take 2-3 business days. They'll require that you fill out a bit more information, and even ask for a picture of you holding your driver's license next to your face to confirm your identity. It took a few days for me to be confirmed, so knock it out early.
- Wire everything over early. As soon as you know your final funds to close and the closing date, call whichever credit card company(s) that you'll be using and let them know that you'll be making a pretty significant purchase within the next few days. Then send the funds to the title company through the wire transfer feature in Plastiq. Obviously take into account the 2.5% fee and the $30 wire fee. I have a Capital City Visa card with an 18k credit limit, so to be safe I only put $17,400 as the amount to wire. After the fees and such it bumped up to $17,865.
- Jump through their hoops. Plastiq asked me to send them the title company's contact info, and upload the final closing docs and the purchase and sale agreement with any addendums. Once submitted they said it was under review. After a few hours they asked me for a screenshot from the credit card account showing the pending amount. I sent everything over promptly and got an email the same day saying that the wire was approved and sent. I confirmed with title and sure enough, everything was there!
NOTES:
Ask Questions. I was very skeptical and cautious because I was relying on these business lines of credit to make this deal possible. I asked a ton of questions of both Fund and Grow and Plastiq, and I highly recommend you do the same because every deal and financial situation can look different.
Get the Clear to Close. Cash deals are obviously different, but this was a traditional mortgage through a bank so I had to show sufficient funds to close between all the personal and business accounts* along with every other mortgage requirement. Business lines of credit don't count as funds to close, so you'll need to show and source sufficient funds before they give the go-ahead. From what I've heard, banks just need plausible deniability as far as funds go, so once you have the "clear to close", you can theoretically wire funds from somewhere else without issue. I'm not an attorney, not a mortgage broker, not a bank, etc., etc.
*make sure that your name is on all the business accounts that you use and get written permission from the other members to use the funds.
Have good credit. Fund and Grow does ding your personal credit, and those inquiries will be asked about by the mortgage underwriter. Tell the truth. Your company is applying for business lines of credit through your credit score, but you are not personally liable for those accounts. If your credit score is high enough, you shouldn't have any issues.
This is information I wish I had before doing this deal, so hopefully it's helpful! Good luck and God Bless!
