All Forum Posts by: Matthew Addison

Quote from @Karthik Natarajan:

thanks Erik.. any recommendations on a Broker?

 Well, I'm one and happy to help present options side by side and explain the difference between each. Not just rates, but prepayment penalties, terms, and origination fees.

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Quote from @Muhammad Amawi:

As someone who used to sell Whole Life Insurance I can tell you it is a great savings vehicle. It's best you get started now while you're young because it is very inexpensive for a ton of permanent insurance. 

Now when it comes to using the cash value down the road, understand that we're talking 10+ years down the road. The cash value will build quicker from having a larger policy. Also note that when pulling from some cash value accounts, their may be a requirement to pay it back. (you may be able to defer this to come out of the death payment.)

I personally do use whole life insurance for everything you stated above, as well as providing the financial protecting for my loved ones if something were to happen to myself sooner than expected.

Let me know if you need an agent reference.

 I think that you are confusing a typical whole life policy with a maximum over-funded policy. Several of the things you state are simply not true.

1. The cash value of a maximum over-funded policy can be leveraged from Day 1. If a policy owner puts in a $50,000 annual premium, they will have access to over $40,000 IMMEDIATELY (regardless of age. See #3)

2. Policy loans don't have to be paid back ever. There just needs to be enough cash value to secure the loan. This is how a Life Insurance Retirement Plan (LIRP) works. When the policy owner dies, the loan is paid off from the death benefit. When you leverage the cash value to invest in real estate, the policy owner will typically only pay the interest on the policy loan. They'll keep the loan in place for as long as it is making them money.

3. Age doesn't matter in a maximum over-funded policy. Sure, if you NEED a $1M death benefit, then it will get more expensive as you get older. But in a maximum over-funded policy, we typically start with the premium and work backward to find the lowest death benefit that will still legally qualify as life insurance. So whether you are 25 or 55, the same premium will result in roughly the same cash value ratios.

@Ladeg Mulb what do you mean by 'bypass a down payment?' You don't need a downpayment on a refi since you are replacing the current loan (seller financed loan) with a new DSCR loan. @Katherine Blazer laid out how buying under market and doing a delayed financing option is a great option as well. If delayed isnt an option, I have lenders who have 3-4 month seasoning for 75% LTV cash out options so you can reassure the seller that they wont hold the note for very long. DM or reply with questions.

A couple thoughts:

1. If you require it, you should require the tenant to add you as "additional insured" on the policy. This doesn't cost anything extra, but it adds another layer of protection for you under their policy (only for liability coverage) and it enables you to track the policy. You will be notified any time the tenant cancels their policy, changes it, renews it, lapses in payments, etc.

2. You have to be willing to enforce it, and that's hard to do. If the Tenant cancels their insurance two days after moving in, what are you going to do about it? What can you do about it?

I never required it because I didn't want the administrative burden of tracking / enforcing. I fixed that by getting a Master Insurance policy that provides renter's insurance for every rental I manage. Tenants are charged as part of their rent and automatically enrolled the day their lease starts. So much easier!

@Tricia O'Brien will do!

Yes sir. Victor Valera above actually is a reliable contractor and I have a couple others. I just sent you my number via DM.

Will

Hey Jared,

My top advice would be to look into getting a VA loan and utilizing it however you can. You can only have one VA loan at a time, but you can refinance the loan after 12 months into a conventional and then go get another VA loan again. That gives you a lot of flexibility where you can invest to get cashflow.

In terms of good markets, I believe there are great deals in any market. You just have to look a lot and run the numbers. the Biggerpockets calculators are a big help.

Hope this helps!

Tyler

First Tech! They can do 90% LTV