All Forum Posts by: Vincent N

I own a whole life policy, and it's worked out fine for me. The way I see it, I divide my financial pie primarily into 3 slices: living expenses, investments, and liquid funds.

People who say that whole life is a horrible investment are absolutely correct, that's why you should never buy it as an investment. I find the argument to buy term and invest the rest irrelevant, because whole life for me is NOT an investment. It is a part of my liquid funds. Most experts recommend everyone have between a 6-12 month emergency fund, and many buy and hold RE investors recommend budgeting 50% of your rental income for expenses.

Where do most people park the money for emergencies if they lose their job, vacancies, major repairs, medical emergencies, etc? These funds need to be readily available (within a week) and reliably safe. Checking/savings account? Safe, but they have almost no return. CD's? Better returns (slightly), but penalties if you have to liquidate it early. Whole life? High initial fees & modest returns. Lines of credit? Cheap & relatively easy to obtain, but potentially unavailable if the bank changes its mind. Stocks & mutual funds? Notoriously volatile. You'll most likely need to access your emergency fund if the economy tanks. If your liquid funds are in the stock market, you may have to liquidate your stocks at firesale prices to pay your bills.

In other words, there is no perfect place to park your liquid funds that is safe, quickly accessible, and has a high return. I honestly do a combination of the above, with the CV in my whole life an essential part of my liquid savings. Hopefully, I will never access my CV, and it will earn a reasonable, safe return of 3-6% annually with an additional bonus of a death benefit. I've also overfunded my whole life to the MEC so it pays its own premiums so I have even less to worry. For people still concerned about the poor ROI, I sleep well at night knowing that my heirs will receive more than 10x what I paid in premiums completely tax free from the death benefit after I pass away. The way I see it, that's not too bad of a return. (There are additional benefits, but I will leave that for another discussion)

Thanks guys. I thought I was correct, but she was pretty adamant. If she was right, I'd have to dramatically shift my investment strategy. Now I know I'm good to go.

Hi everyone. I have a quick question. As I understand it, if I lived in my primary residence for 2 out of the last 5 years, I would not be taxed for the capital gains from the sale of my home for up to $250k if I'm single & $500k if I'm married.

I was planning on selling my current primary residence now, which I have owned and lived in for only two years, in order to take advantage of my 121 exclusion. However, my accountant says I have to own the property (either as a rental or an owner occupant) for an additional 3 years (for a total of 5 years) before I can claim a 121 exclusion. Which of us is correct?

@Mehran Kamari. Thx. Ideally, I'm looking for a mix of appreciation & cash flow. My COCR is about 10%, but will probably double that when it's a vacation rental since they're above average oceanfront properties. That COCR might not be that great for some parts of the US, but it's pretty good for Hawaii. The clincher, however, is that they've almost doubled in value so my ROI is pretty good. Lucky for me, when the last bubble burst, I didn't have any assets to lose, so I was in a perfect position to acquire before the recent upturn. Sometimes it's better to be lucky than good, but I'm hoping with the help of the my fellow BP members I'll be both lucky & good.

@Aaron Mazzrillo. I agree. Good cashflow will let you ride out both the highs & lows of every cycle.

@Jenkins Ramon, thanks for being the first to welcome me.

@Michael Mazzella @ Michael Borger, I think you two may have the right idea. The last few years with lower prices, it was actually possible to find cash flowing properties in Hawaii. Now, with the market pretty hot, it's a lot tougher to find those deals & flipping might be the way to go.

I have pretty solid income from my job, so luckily, I don't need to live off my real estate investments. Any real estate gains have been reinvested, & I'm further augmenting it with my income from work. My plan is to build a solid foundation of cash flowing properties as a safety net supplemented by an occasional 1031 flip to supercharge my equity (I'd rather not take the big tax bite from traditional short term flipping). Longer term, I'd like to take all my equity & 1031 it into an apartment complex (s) or some other cash flowing properties & take an early retirement. :)

Of course, all that may change as circumstances change, but if you're gonna dream, you might as well dream big! :)

Long time lurker. First time poster. As with many on this site, the information I've gleaned from this site has been priceless. Thanks to everyone who has contributed over the years.

My dad is a long time realtor and property manager in California, so I guess you could say it's in my blood. I have a great job that pays very well, but real estate is the path I plan on securing my financial freedom.

I'm a somewhat new real estate investor that moved to Hawaii four years ago. Since 2010, I've bought three condos in Waikiki, a townhouse in Hawaii Kai, and have a prebuild in Kakaako. I rehabbed three of the properties, and I'm personally managing the condos as cash flowing long term rentals. When the current tenants move out, I plan on converting them to vacation rentals with the help of a virtual assistant.

I have good credit and financials, and I'm always looking for a good investment. My bread and butter are cash flowing properties, but I'm amenable to augmenting it with an occasional flip. If you're in the area, and looking to network or find a good deal, hit me up.