Spouse dying investing life insurance money

Richmond, Virginia
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Spouse dying investing life insurance money

Dena Sommers
Member since 2022 · 6 posts · 2 votes

My bread winner spouse is dying of cancer. I will inherit his life insurance money. I do not have a "real" job but one that makes some money…not enough to support a family. Docs says he has a year to live. He makes excellent money. We have 2 children under 18 to support. I am thinking what can my spouse do to help me launch so I can make enough to pay the bills because once he passes I won't be able to afford our home and lifestyle. I asked him to take out a HELOC for a down payment then qualify for another home. I am looking at short term vacation rentals. Right now just looking to break even then take insurance money, pay it down and buy another short term rental. I need help because I am soon to be a single mother with hardly any income. I plan on getting a full time job with benefits once he passes but doubt it will be enough. Is this achievable and a good idea?


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Todd Rasmussen
Rental Property Investor · Clarksville, TN · Member since 2016 · 1k+ posts · 1k+ votes
4y

@Dena Sommers

Well that's some **** news. I'm sorry for what your family is and will be going through.

Taking a HELOC as a down payment will not work for a period of time, (2-3 months) as the lender will require you to source large deposits during underwriting and a borrowed down payment won't be allowed. This is commonly referred to as seasoning if you wish to do more research on that specific topic.

Without getting all of your financial details, I could only offer some generic methods for you to determine what paths are available to you. Take your husband's annual income, subtract the additional income you will make, divide it by the expected proceeds from his life insurance policy and multiply that by 100. That is the return you have to get to maintain your lifestyle. If that is not feasible, you have to work both sides of the equation and reduce expenses as well as generate additional income.

My father in law was told he had a few months to live. He started eating three almonds a day and 20 years later swears that was the difference. May not help, but it couldn't hurt.

I'll be praying for your family.

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  • James Carlson
    Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes
    4y

    @Dena Sommers

    I'm sorry to hear about your husband. I have had a lot of my close family die of cancer. It's tough.

    This all depends on what that payout looks like, but in general I do think a vacation rental or short-term rental is a great investment. And if you manage it yourself, the monthly cash flow could really be a help as well as you start to fend for yourself financially. 

    For many people operating a short-term rental is the easiest quick cash-flowing business to start. There's some good info on here. And there are certainly books out there, but running an STR is not rocket science. Buy a cute place in a decent location, furnish it well, pay for good photographs (super important), maybe add in some special touches -- coffee bar with little snacks, a game room, a hot tub (hot tubs do really well) -- and then be responsive to customers' requests.

    There are so many good Airbnb markets out there, so poke around this site a bit. Some markets are obvious -- like ski towns and beach towns. Others are not. (See my client who bought a home in Wheat Ridge, just outside of Denver, is self-managing it as an Airbnb and is cash flowing just over $4,000/mo.)

    I wish you the best in your personal and professional future. 

    0Reply
  • John Norman
    Member since 2022 · 10 posts · 1 vote
    4y

    Buy a couple homes that you can rent out. I'm seeing $2000 or more a month from a 3 bedroom unit. I have some you can buy.

    0Reply
  • Todd Rasmussen
    Rental Property Investor · Clarksville, TN · Member since 2016 · 1k+ posts · 1k+ votes
    4y

    @Dena Sommers

    Well that's some **** news. I'm sorry for what your family is and will be going through.

    Taking a HELOC as a down payment will not work for a period of time, (2-3 months) as the lender will require you to source large deposits during underwriting and a borrowed down payment won't be allowed. This is commonly referred to as seasoning if you wish to do more research on that specific topic.

    Without getting all of your financial details, I could only offer some generic methods for you to determine what paths are available to you. Take your husband's annual income, subtract the additional income you will make, divide it by the expected proceeds from his life insurance policy and multiply that by 100. That is the return you have to get to maintain your lifestyle. If that is not feasible, you have to work both sides of the equation and reduce expenses as well as generate additional income.

    My father in law was told he had a few months to live. He started eating three almonds a day and 20 years later swears that was the difference. May not help, but it couldn't hurt.

    I'll be praying for your family.

    2Reply
  • Dena Sommers
    OP
    Member since 2022 · 6 posts · 2 votes
    4y

    Thank you!!!! 

    0Reply
  • Zachary Paschke
    Scranton, PA · Member since 2017 · 168 posts · 137 votes
    4y

    I’m sorry for what you’re going through. I have a rental note and an insurance note:

    Insurance: most life insurance policies have a terminal Illness rider that allows you to get access to the money early (keep in mind they’ll discount the death benefit but it might be worth checking on how much if it would be of more help now than later).

    Rental: find overlap between a job and the rental. If you are managing short term rentals, do it for other investors and charge a fee. You won’t have to visit the homes much yourself, you can hire out cleaners, handymen… there’s lots of tips in this site about how to do that. 

    When it comes to obtaining property look at secondary markets. Better to pay $150k for a property that will rent for $4k/ month than a $600k property that will rent for $6k/ month. Look for areas near hospitals where you can rent to travel nurses. Buy somewhere where you can long-term rent if you short term dries up. 

    Job ideas: I’d look at building a business from home. I sell life and health insurance in 17 states from home. It offers a lot of flexibility, and if you’re good it is incredibly profitable! You don’t have to do that, but you can do something like that. The property management job would be like that. 

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