7702 Plan for Investing

[Jason King]

Hi BPers, 

I was at my local REIA meeting last night and we got on the topic of creative financing. Someone brought up a concept I had never heard of before, 7702 plan. The way it was described is this is an insurance plan that you can buy that after 6-7 years of premium payments you can borrow against it and invest, with the profits being tax-free! You can see why my ears perked up at this point. After a quick google search, it seems that there are a lot of people advocating AGAINST this type of plan, though mostly if it is being used as a retirement vehicle. I am curious, has anyone here ever heard of, or even better, have used this as a way to creatively finance any deals? I am curious to see what people have to say about this one.