Using life insurance to buy real estate
Here comes the bride, all dressed in life insurance and real estate.Today, real estate and life insurance are getting married and I want to share with you why. A lot of you are like, “What? You can be using life insurance to buy real estate?” My friends, that’s something that I do on a regular basis.
And if you love the idea of making tax-free money, if you love tax for your growth, if you love tax benefits and tax efficiencies, I’m going to tell you right now, that’s why I marry real estate with life insurance.
And today what I want to do in this video is I want to give you a real world example of how I do this on a regular basis and how you can do this too. Let’s assume for today’s conversation that you’ve set up a smart insurance policy.
What we’re talking about is whole life. It’s not term insurance. And whole life means that every month when you put money into it, a little bit of it goes towards your death benefit and a big part of it goes towards your living benefit.
And so, it’s cool to have something for our loved ones when we pass on. But there’s a massive benefit that you stand today to gain because there’s living benefits of how you do this. Let’s just say for a moment that in your life insurance policy, you’ve been paying into it for a while.
And let’s just say theoretically that you or someone else’s policy has built up to $30,000. And this is what is called cash value. So, I have my whole life policy. I might have a death benefit let’s just say for 1 million dollars if I die.
But I have a cash value that is building up above and beyond the immediate benefit that my loved ones get if I die. And that benefit is called Cash Value. Now, if you set your policy at the right way.
.. And by the way, at the end of this video, I’m going to introduce you to the guys that do this the right way because 9 out of 10 don’t know how to structure it the right way. They’re also not incentivized to structure it the right way because they earn less commissions.
I’ll share with you some of the dirty secrets of that industry but how smart people like you and I, I can help you work around it my friend. Now, let’s just say that you or someone you know has $30,000 of cash value.
And let’s just say for all intents and purposes that we want to pull it out and that we want to put it into a piece of property. So, it’s a down payment on a property. We’ll say that the value of the home is a $150,000.
And now we’re going to owe roughly $120,000 because we put a 20% down payment which is $30,000. And it came from our life insurance policy. Now, first of all understand this: A lot of these policies, when they’re set up the right way, they’re earning you a dividend.
In this case, let’s just say that while it was sitting in cash value that it was earning 5%. It’s often doing that or more over their last 10, 20, 30 year trends. But if I want to pull it out, the Bank of the whole life policy is going to say, Kris, you got to pay something to borrow that money.
” So, I’m borrowing it from myself that I put in. And they’re going to let me borrow it plus or minus 1% of 5%. And so, what that means at the end of the day is maybe I have a 1% cost. 1% on 30,000 comes out to being about $25 a month.
Good news, guess what this property’s producing? It’s producing a positive cashflow. Meaning after the mortgage is paid, it’s paying me let’s say $300 a month. Now, can you afford to borrow it 25 when the cost is 300? Yes, but I’ll do you one better.
You don’t have to pay this 25 bucks. Next month, your policy if you were to die isn’t a million, it would be $9,999,975. So, it actually just comes off of the benefit which means it’s never going to come out of your pocket.
That’s actually kind of cool. So, really my cost is 25 dollars but I don’t even have to realize it. This $300 a month. That’s now cash flow that I get. Now, check this out: Let’s say that I hold this property for 5 years.
And because I was earning a 20% annual ROI, if I make 20% on my money this year and 20% next year in 20%, twenty and twenty. After 5 years, have made 100% of my money. Which means I sell this and I get back how much? I get back $60,000.
$30,000 that I put back in, guess what I’m going to do? I can put that right back in my life insurance policy. I’m back to earning 5% and it’s growing tax-free. Cool, right? But I have 30,000 left over.
Guess what I can do with that? I can maneuver that or this money and that money. And now I can put them into multiple new projects. Now, my cash flows in $300 a month and my cash flows $600 a month/ And guess what my friend? You are on your way now.
This is the cool part. Final thing that I want to share with you is that in the beginning, this whole life insurance policy, it helps you get some initial steam and momentum. You do a deal. But 1 turns into 2.
And 2 turns into 4. And 4 turns into 8. And 16 and 32. And before you know it, the amount of time that it takes you to make a little bit of money is the same amount of time that it takes to make a whole landslide of money.
And that’s the whole point here. Real estate and life insurance should get married. Now, in the description below, before I share this last bonus with you, there’s a team that I’ve come to know and work with.
And these are really, really good guys. They’ve got an amazing huge firm. And they believe that it’s important for you to put your money into life insurance and be able to pull it right back out to support your entrepreneurial advances, your business and most importantly, real estate.
So these guys will actually structure these deals in a way that most insurance people never would dream of because they earn these tiny little miniscule commissions. But it’s in service of you. It’s in service of your best interest.
They are amazing at what they do in the entire financial planning industry. And they get the crown jewel of real estate investment. So check it out my friend, just a couple of last reasons why I think that real estate life insurance deserve to be married in your world is that number 1, both of them have the ability to grow tax-free.
Number 2, they can sit inside of each other at the same time and produce multiple benefits. Number 3, they combined produce returns way bigger than the stock market. If the stock market can’t in 30 years produce enough for you to retire, this vehicle certainly has the potential and the ability.
Number 4 both produce a residual income. You know that one of my rules of investing is that has got to pay me to actually be an investment that isn’t classified as speculative. And number 5, life insurance is untouchable so why your money sitting into it? No one can ever lay their hands on it.
And then the last benefit is that real estate has the potential to double your money fairly quickly. So, you combine all those together and guess what you get? You start getting a super sophisticated, super strategy.
Now, when’s the right time to put something like this together? What comes first, the chicken or the egg? Is it real estate or is it life insurance? Well let me tell you right now. First of all, let’s talk to those of you that have some money and those that don’t.
For those that have money in a 401 K or an IRA, you’re late to the party. Imagine a bank account making you 5% on your money that you can then direct and do other investments. The time would be now.
But for those of you that actually say well, “Kris, I’m just starting out. I don’t I don’t really… I’ve even hardly started saving money. But i’m just… I guess got a job. I’m just starting to get ahead a little bit.
” Rule number 1 is you’ve got to pay yourself first. And where you put that money should undoubtedly be in life insurance. So, let’s say that in the beginning, you are going to save $100 a month or $300 a month.
You should try to save as much of what you’re making in the form of paying yourself above and beyond your bills. Stop using the money to support your lifestyles. Start using it to support your future in the life that you’re creating for yourself.
Life insurance is your brand-new bank. And so whether you’re saving 100 month, 300 a month or 3,000 a month, this is every month where you want to stockpile the money. It’s growing, it’s untouchable.
As producing great benefits, it’s growing tax-free and it’s just waiting for the day when you get to access it to put it into another investment vehicle. So my friends, the time for getting started with this kind of strategy is now.
Now, there’s a number of different people that you could talk to about setting this up. And if you know someone in life insurance, they likely do not know have this strategy or the type of bank where they can set this up the right way.
In fact, I’ll tell you that over the years I have only found a handful of people out of hundreds that have the ability to do what I’m talking about. You can find a hook up for a list of those individuals if you actually click in the description below.
And if you talk with any of them that come from that link, trust me, they know what they’re doing, they have your best interests at heart and they understand that real estate is the crown jewel. Friends, thank you so much for reading this using life insurance to buy real estate article and hope you earn something useful from it.
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Thank you for this article,i found it useful for my career as an insurance student who hope to be an insurance expert some day.