For the second round of credit card arbitrage investment strategy, 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.

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.