Strategy
My first experiment ended with success. I balance transferred $219,497, invested in DLI Fund, and earned $17,951 net profit. For the 2nd round, I am going to invest in real estate crowdfunding for short-term and high-yield investment opportunities. Groundfloor will be my primary platform, and iFunding for backup. In theory, a 16% ROI over 12-months with a borrowing cost of 3% will generate 13% profit.
Total Balance Transfers: $352,711
| Date | Credit Card | Promotion | Cash | Balance |
|---|---|---|---|---|
| 07/11/2016 | Discover More | 13m/0%/3% | $16,000 | $16,480 |
| 08/10/2016 | BankAmericard Cash Rewards | 15m/0%/3% | $19,400 | $19,982 |
| 08/10/2016 | BankAmericard Travel Rewards | 15m/0%/3% | $19,400 | $19,982 |
| 08/10/2016 | Citi Dividend Platinum Select | 10m/0%/3% | $18,000 | $18,540 |
| 08/10/2016 | Citi Diamond Preferred | 10m/0%/3% | $21,500 | $22,145 |
| 08/15/2016 | BankAmericard Platinum Plus | 18m/0%/0% | $19,961 | $19,961 |
| 08/19/2016 | Discover it | 12m/0%/3% | $20,800 | $21,424 |
| 08/30/2016 | Citi Double Cash | 17m/0%/5% | $21,000 | $22,050 |
| 09/17/2016 | Discover it | 12m/0%/3% | $7,000 | $7,210 |
| 09/21/2016 | NFL Extra Points | 15m/0%/3% | $14,500 | $14,935 |
| 09/21/2016 | Discover it | 12m/0%/3% | $14,800 | $15,244 |
| 09/21/2016 | Citi Simplicity | 21m/0%/3% | $24,200 | $24,926 |
| 09/22/2016 | MLB BankAmericard Cash Rewards | 12m/0%/3% | $19,700 | $20,291 |
| 09/23/2016 | BankAmericard Cash Rewards | 12m/0%/3% | $19,400 | $19,982 |
| 09/23/2016 | BankAmericard Platinum Plus | 12m/0%/3% | $19,400 | $19,982 |
| 09/23/2016 | Citi Double Cash | 10m/0%/3% | $24,200 | $24,926 |
| 10/05/2016 | Chase Slate | 15m/0%/2% | $14,250 | $14,535 |
| 10/05/2016 | Chase Freedom Unlimited | 14m/0%/5% | $15,000 | $15,750 |
| 10/13/2016 | Citi ThankYou Preferred | 16m/0%/3% | $24,200 | $24,926 |
| Total | 13.87 months, 0% APR, 2.99% fee | $352,711 | $363,271 | |
I’ve transferred a total balance of $352,711 from 19 different credit cards. The cost of borrowing was 2.99% or $10,560 for 13.87 months.
Return On Investment (ROI): 7.22%
| Description | Net Profit/Loss | Net Return |
|---|---|---|
| EVIVA Midtown Project (iFunding) | $18,860 | 19.74% |
| Short-Term Small Business Loans (DLI Fund) | $17,164 | 8.45% |
| Balance Transfer Fees | ($10,560) | (2.99%) |
| Total Return On Investment | $25,464 | 7.22% |
An estimated return on a crowdfunding real estate investment over 12 months is 19.74%, DLI Fund over 10 months is 8.45%. After subtracting the balance transfer fees, my estimated ROI for this round is 7.22%.
Cash drag is the opportunity cost of cash. I had a $80,000 drag with Groundfloor for a month, $250,000 drag with iFunding for 2 months.
Highlight
Balance Transfer Mistakes
I made some mistakes when transferring balances and cashing out.
- Citi offers 3% fee & 0% APR for 12 months deals. I should have waited a couple more weeks for better promotions rather than taking higher rate or shorter term offers.
- For credit cards that require balance transfer to cash via over-payment, use a 0% fee direct deposit option from Citi. This is the fastest & easiest way to cash out. I shouldn’t have transferred to U.S. Bank for this purpose. I had to reverse all balance transfers. It triggered massive account closure with Bank of America.
- Chase takes longer time to offer balance transfer deals after credit score is restored. I started another transfers too soon.
- Applying Capital One, American Express, and U.S. Bank credit cards at App-O-Rama phase was not necessary. They are not balance transfer friendly. Due to the Chase 5/24 Rule, I won’t be able to get new Chase cards until September 2018.
Change of Investment Plan
I had to revise my investment plan multiple times.
- Groundfloor was experiencing the lack of volume in their loan offerings prior to 2017.
- iFunding terminated ProudLiving Project.
- 70% of balance transfer funds ended up investing in DLI Fund.
- Due to a change in my investment strategy, I decided to payoff credit cards earlier to terminate Round #2. I will begin Round #3 in early 2018.
Other Points
- Bank of America, Citi, and Chase are the 3 best banks for a balance transfer. I can always count on $80,000 ($20,000 x 4) from Bank of America, $100,000 ($25,000 x 4) from Citi, and $60,000 ($15,000 x 4) from Chase.
- The credit card minimum monthly payments were little over $4,000. Thus, total monthly spending (including household & living expenses) was close to $10,000. I was able to cover it with a full time salary.
