All Forum Posts by: Sean Ruggiero

I have an idea, did you watch the recent episode about "Become your own bank" if you research the Whole Life situation it has really excellent tax advantages, you basically get a tax shield and give a loan to yourself while still accruing interest on your money.. definitely worth looking in to a specially designed Whole Life insurance policy.

I followed up with a couple people on BiggerPockets that had these policies and they said they were very happy with them.

I see its a complex product, and thank you guys for the feedback! At what income level do you guys think you need to really get a benefit, I understand if you don't have enough money it won't make sense because your paying operational costs of the policy without getting a high percentage of actual access to your money?

Quarter million, half million? Is it true you can still get good dividends on ALL of your money even when you have borrowed 90% of it back out? 

It sounds like Chris Naugle sells this idea (if you research after the episode), but; doesn't it sound way too good to be true?

Chris kind of glossed over this since it was his intermediary between flips and flops, but does anyone have any thoughts here?

I love Bigger Pockets so much but I hate how I always want ten plus hour episodes and they cut short this fire content just when the speakers are really getting on a role!

In any case, I did several hours of research on this topic afterword and would love to open a discussion on it! There are many different Whole Life Insurance companies, and within the companies there are many different policies. Let's get a discussion going! What do you think about this strategy?

I live within a couple miles of this area and have researched these types of purchases somewhat extensively when I had considered them myself. My opinion is yes, from a short term numbers standpoint it can work. However, and this is a massive issue in my opinion, the COA can change the rules at any time if you stir up trouble (and this type of rental is known to stir up trouble from time to time, for sure, even for skilled management). 

That is one of the biggest pitfalls in my opinion. Keep in mind your property value can drop substantially with various changes and you have a lot of risk going in to a deal like this.

Secondly, a general thing always to remember when buying condos is that you have to be good at vetting the associations and have the foresight to keep special assessments in mind, special assessments in various areas around the Florida coast are much more impactful than most other areas of the country.

Good luck!

The actual timing of the rehab work will (to maximize your return) happen BEFORE you use delayed financing for your cash out refinance, but AFTER you have closed on the property as an all-cash buyer. YOU HAVE TO FUND THE REHAB WITH YOUR OWN CASH FIRST within the 6 months, even after paying for the property all cash to begin with, if you want it returned. So if you buy a house day 1 in cash, plan to rehab it, but go day 2 to get a 70% LTV refinance for example, you can do it but you can't get paid for rehab money that you think you might be spending. Now, IF you SPEND that money, you can still get 70% of it back in this example, say if you did rehab and it took 2 months and you went to refinance 2 months and 1 day later. I think that is the direct answer to your timeline question, is it not?

Think about this: you and a buddy get creative in robbing a bank. You buy a burned down, "could be" million dollar house for 100k and say it needs an estimated rehab of 900k, you close in cash for a hundred and go to the bank for 700k (70% LTV). The bank grants the loan and you run off to some other country with 600k profit and leave the property for dead.

I believe you may be thinking its a little bit like a 203k loan in some sense but I don't think delayed financing allows for any draws and so the rehab timeline is at your choosing within the 6 months, but you only get paid if you ALREADY put your OWN cash up, and it appraised right.

Not an expert but, pretty sure that's a good understanding. So its really your choosing to go sooner and get less, or do your rehab and go later but get more. Hope that helps.

If you have a parent that is willing to work with you that is a HUGE advantage and you are definitely in striking range to make a deal happen. Your personal income statement may be lacking right now but if you have a parent that is willing to supply down payment funds and cosign a loan you have more than enough. Study study study on deals, it sounds like you may have a deal but yes the 10 years vacant is a huge red flag (buildings in this area for example have iron pipes that collapse when the units go vacant for extended periods and cost tens of thousands just for that, do a sewer scope test as part of your inspection!!!) as one of many potential issues..

An alternate option, if you can find something "habitable", you can probably qualify for a FHA first-time home buyer, or even conventional 5% down loan on a more expensive property with your parent as a cosigner. Look at a few hundred deals and buy the best one, do some cosmetic fixing and bump the rents and you're in business!

All in all you are making the right moves, you don't need to put 30% down on your first property, you just need a way around your spotty income history. Buy something habitable with instant equity in the deal and fix and manage it from there, something 2-4 units, and get a thorough inspection and make sure it has good cash flow and I think you will be in a solid position if you go that rout. 

Also consider a conversion to a mother-in-law suit, the areas around there are highly tolerant of them because of the housing shortages

83.49 (3)(a) cites, “the landlord shall have 30 days to give the tenant written notice by certified mail to the tenant’s last known mailing address of his or her intention to impose a claim on the deposit”

I’m wondering if anyone has any real life experience with this. The law says a landlord must communicate via certified mail, do all judges rule on this based on whether or not the mail was actually sent certified?


I have an attorney telling me tenants will win all cases where a landlord hand delivered, emailed, or otherwise communicated this info, even if the landlord has proof (like a signed document) that the tenant got the info. Does anyone know anything about this? Do judges rule based on the letter of the law or the spirit of the law in cases like this?

Going to make sure I cross my T’s and dot my I’s moving forward! Thanks guys!

Thanks, yea I have done the same here in Broward County through BCPA.net as well as a number of other resources.. I was thinking though, for rentals also, it kind of surprised me there wasn't a place where you could order comps, kind of like what a bpo offers but without going so far in depth. I guess people just do it themselves or hire property management to do it.. still feel like it would be a good tool for a more hands off property owner to cross reference their property management company, or for people who want to save some time when they do their rental adjustments and whatnot. Well anyway, I guess I'll keep looking around for now.

I think you will find a massive variance in the answers for those questions based upon what private or hard money lender you are using. It sounds like you are familiar with using a loan against your self-directed IRA or retirement account which is like giving cash to yourself that you will pay back to yourself.

Outside of that, you can answer a lot of those by thinking in terms of what a hard money lender is looking for. They will be looking at the asset and how secure the loan is, what the situation will be like and where their position will be if they do have to foreclose. They will obviously be collateralizing the debt and looking for a strong position to mitigate their risk. Beyond that, the sky is the limit, you can even make up your own terms and present them or make counter-offers to their initial offers, negotiate.

Because there are not nearly as many laws around hard money lending as compared to conventional mortgages it makes it so that basically everything is up for negotiation. Think for the win-win. I would suggest shopping around and then writing down what you want, and asking people what is important to them in order to optimize the win-win strategy and to be clear with yourself about your own terms. Hope that helps, best luck!