All Forum Posts by: David VanSteenkiste

Oh yes, whole life insurance is a fantastic investment, especially at your age. Use a technique called infinite banking. I highly recommend Northwestern Mutual. With whole life buy policies where you can maximize cash value the quickest with lower death benefit. You can mix and match some term if you want more death benefit. This allows your premiums to be a little cheaper. NMFN also has a term product that can be later converted to whole/permanent.
Essentially, after about 7 years you will have build up a nice cash value to the point where you won't actually be paying any more premiums for insurance. Your input goes straight to cash value. You can then pull up to 90% of the CV out as a loan, tax free and use it for anything (RE is a great choice). Ex, if your CV was 100k you could pull out 90k. On paper though, your account would still acrue interest as if the cash were still in the account. Mine has averaged 6% over the past few years. So lets say you use the cash to buy some rentals were the cash on cash return was 25%. Because you are still making 6% on the fictitious money in the LI account your real return is 31%. AWESOME! Talk about additional leverage. Now, the loan is due to be paid back at 6-8%, but you are paying it back to yourself. It goes straight to CV. Technically you are never required to pay it back. If you die, the death benefit will be paid to your heirs minus the amount of the loan you have taken out. But so what. With the loan you have taken, you used it to purchase cash flowing RE that your heirs can live on.
Infinite banking is a fantastic tool. I wish I had started at 25!

Thanks for the input. You both have answered my questions. I agree with statement of "slapping lipstick on a pig". Certainly the deductions to offset sOme of the rental income, not to write off losses. 1031 is my exiling strategy on rentals, and I do not invest in Boulde proper. You are 100% correct. Rentals here typically do not pencil.

Does none know if there is n income level at which you are not allowed to take tax deductions fom RE? Ex. If you are a high income W2 employee and want to start investing in RE. How does he 86 tax law effect you? Can you get around the restrictions is entity structure, etc?

And then we have the wild card of currency debasement, the European crisis (which ain't going away people) and the fact that recessions cycle about every 6 years. The worse the debt, typically the worse the recession. 2001 (8mo) was bad enough, and 2007 (18mo) was worse because the debt was worse. We are due for another recession in 2013/2014. How bad will it be and how long will it last? Heck it feels like we are still in the 2007 recession now!
So 2012 might be dry, but opportunity will abound again. Its just a matter of when and under what circumstances. Might we have hyper inflation and investment prohibitive interest rates?
Sorry to be the doomsdayer.:)

I would agree with most of the comments posted. FYI there is a large project with the Police Department and a huge new crime lab around 27th St and Prospect. It will employ 1200 people, deploy many more police to the street as well as have an impact on local business and drive rents and hopefully prop values. Great cash flow to be had, but as the gentleman said, not for the novice or faint of heart. There are some turn key deals out there if you want SFR rentals. But be sure to go get a stellar property manager in place whom specializes in those areas.
Im optimistic about the inner city based on some of the public investment happening. Check out http://www.saferkc.com/.