Using life settlements to finance real estate acquisitions

[John Wright]

I have been buying and selling real estate for about fifteen years in several different states.  I have had major ups and downs both in spite of and despite the pricing bubble that we experienced.  Mine has been a success story but perhaps my biggest source of frustration has always been my limitation in sourcing the necessary equity component to get more deals done aggressively.  I guess one of the biggest lessons that I have learned in the real estate field is the usefulness of leverage as a potentially helpful, but also potentially harmful tool. I've always liked the idea of being able to tie up 5-10x the dollar amount that I put down to purchase a property, rent it out and collect rental income.  I recently did a deal with a guy who I have known for about 10 years and I was amazed at how well he has done.  We talked shop for a while and he told me that he has been able to get equity for his deals through some sort of life settlement structure using insurance policies that he purchases at a discount from people who are perceived to be terminally ill, aged or some other reason why there is a higher likelihood that the policy could be redeemed for a higher value.  I'm not exactly sure how it is supposed to work, but it sounds like it might have merit.  I asked him to get me more information about it but he said that "the minimum investment was way higher than something I would ever be comfortable with doing" and didn't really want to talk about it.  Sorry for my long preamble, but I was wondering if anyone on here has had experience with this sort of thing or knew where I could get more information about it?  Can I actually leverage my existing funds into higher equity amounts to invest with?

[Wayne Brooks]

They're called Viaticals, and have been around a long time.  There are also some notable ponzi schemes involving "investing" in viaticals.