All Forum Posts by: Carlos H DeOliveira

I think it's, you just have decide your risk tolerance for your reserve fund

I consider my stock portfolio reserves, the portion that I consider to be my reserves is invested in a very conservative mix aiming for a return of 4% plus close to 2% in dividends.

It's composed of TIPs, TBILs, some gold and some bonds. Even when the market collapsed, my portfolio was only down about 10% and it bounced back quickly.

Crypto is tougher just because the volatility, you can have 20k in reserves one day, and wake up with 5k in reserves.

@Thomas Rutkowski

If you can take that 5% money and use it to earn 10%, you are creating a 5% arbitrage on the outside of the policy.  I get what you are saying here, but I'm creating arbitrage against an amount that matches what I put in. So it doesn't give me access to money, it just lets me borrow against the policy up to the cash value. If my money wasn't on the policy to begin with I could of made the 10% without paying the 5% back.

Had you done the exact same thing without life insurance, using the same assumptions, you would have given 4% of your 10% income to the IRS leaving you with 6%.  - I invest in single family homes, I'm not being taxed at this rate on my investment income.


Bottom line: It doesn't matter how much money you have. What matters most is how WELL your policy is designed so that you can minimize the length of time it takes to catch up to and surpass where you would have been had you simply taken your money and invested directly into whatever you were planning to do. A properly-designed, maximum over-funded policy should have about 85% cash value to premium. Obviously it would take much less time for this model to work out with that 85% ratio than it would if your cash value to premium ratio was much less than that.

If you are just starting out, only having access to 85% of your cash value, or in other words losing access to 15% of your cashvalue  while having to continue to make premium payments will slow you down.

I don't sell life insurance and don't use whole life insurance, I had one but decided to get rid of, so I'm not disputing anything that you are saying, but if you are starting out on real estate and you saved up $25,000 in cash. In my experience you are better off  investing in your first single family home rather than setting up a policy.

Let me describe my experience, maybe I just had the wrong policy.

It took 3 years for my cash value to match what I had put in, so the way I see it I had 0% return for 3 years

When I was able to borrow against the policy, I had to pay it back with interest and still make my premium payments

At the end of 3 years, I felt as had I not have the life insurance, I could of just invested it in real estate and grown much faster, especially in the beginning when I needed the liquidity the most.

Do you have your own account? If you are an experienced host with a lot of reviews, any of your options  will work just fine.

If you are new to Airbnb and will be managing from long distance, it's probably not a bad idea to use their account while your are still learning the inner workings of the property

@Erica Lawrence I live in RI and have a few properties in Florida that I manage long distance, some are short term rentals others are long term rentals.

Are you still looking on Florida?

Did you end up buying another multi in RI?

I use the Yale SL, I manage it through my ring alarm/ring doorbell.

I have that same lock in 4 houses, haven't had an issue and the double A batteries have lasted over 10 months so far.

@Matthew Fermino Narragansett has much lower property taxes and has potential to be rented off season due to its proximity to the university.

I suggest using AirDNA or Mashvisor to get some occupancy and nightly rate data

@Chris Swier I read the same book and a few others.

The biggest issue is that you borrow against your policy at let's say 5% interest , your yearly dividend is roughly around there too so you get to borrow your own money at 0% interest at best, it takes at least 3 years before your cash value matches what you put in..

So in other words the life insurance will slow you down if you are just starting out.

If you have a lot of money, this strategy may make sense to you, as it's more like a high yield cash savings, it's also protected from creditors in many states so there are definitely benefits, but not when it comes to starting out in real estate

@Michael Hren if you decide to Google, I would definitely look-up the company here on the forum to hear about other's experiences

First I think you need to narrow your search by deciding how much you are looking to spend, how many properties and what your strategy is.

If you are looking for appreciation, cashflow or a little of both. Different markets, price points and property types all have their pros and cons.

@Michael Hren I suggest searching the forum, I was considering them but changed my mind after reading about other's experiences.

I think Roofstock workers well for sellers and experience buyers. If you are a first time buyer I think you may be better off with a turnkey provider who will guide you through the entire process and manage the property after.

@Bryan Hartlen that's incredible what are the property price points and rent to value?