Seeking Advice on Structuring a $150K Loan for Property Investment via IUL Policy

[Phil Avery]

Hello Everyone, 

I am in the process of exploring a unique investment strategy and am seeking a loan of $150,000 at an interest rate ranging between 8-12% for a period of 5 years. My preference is for an interest-only loan, although I am open to an amortized payment schedule as well.

Purpose of the Loan:
The primary utilization of these funds would be to capitalize an Index Universal Life (IUL) Policy. The IUL Policy is intended to act as a revolving line of credit that will enable me to acquire real estate properties.

Security & Safeguards:
To secure the lender's interest, they would be named the primary beneficiary on the IUL policy. Additionally, the lender would carry a second-position lien on any properties acquired using this line of credit.

I would greatly appreciate any insights, recommendations, or potential challenges you might foresee with this structure.

Thank you for taking the time to read my post, and I look forward to your valuable feedback.

Best regards,

[Phil Avery]

Quote from @Jared Rine:

@Phil Avery..as @Jay Thomas mentioned - the difficulty of this is finding a lender who understands and is familiar not only with an IUL, but with utilizing cash-value life insurance policies in a strategy at all.   I understand what you're trying to do as personally I don't have an IUL, but I have a certain type of policy that I draw funds from, but I funded it myself.  I also used to sell these policies, so I get it.  That's likely what you're going to have to do - get yourself into a financial position to fund the policy and then draw against it/use it how you want, whether that's for RE projects, hard money lending, etc. If your credit is good and financials look solid, you might be able to get lines or credit or something to fund the policy. Just my $0.02

Hey Jared, Thanks for sharing your insights. I agree with you. I will most likely have to find a way to fund the policy myself. Which is fine. I've been saving towards this initiative. I was trying to fast-track this strategy as I was getting tired watching several RE deals pass me by. 

I think I will alter my strategy a bit and just work within the scope of traditional deals. At least that will allow me to take action now, while working towards funding this policy.