All Forum Posts by: Mike S.

@Justin Berry

I am using

https://www.floridaregisteredagent.com

The job of registered agent is very simple and you don’t really need to pay more than the cheapest one.

LLC and Land Trusts are tools. Tell us what you are trying to accomplish and we can suggest what tool to use. But if you want the best advice on your specific situation, you should consult an attorney who is well versed in real estate, asset protection and taxes in your specific jurisdiction(s).

As already mentioned before, you would probably want to have different tax status for your buy and hold vs your flips.

For asset protection purpose, you have two main threats: inside liability and outside liability.

The inside liability protection is equivalent in every state, however the outside liability protection varies greatly by state.

That is where using a holding LLC in state where a charging order is a sole remedy can help as any outside liability claim would need first to go through the holding to reach the sub LLC. I believe Ohio has good charging order protection already, so it may not be needed in your case on that point.

Also, if you want to have a partnership for estate planning purpose, it make sense to have all disregarded LLC owned by one holding to only have one tax reporting for the whole structure instead for each sub LLC.

Usually, a management entity is an active business and would better be taxed as a corporation to get all its fringe benefits. It is often recommended to keep the active business completely separated from the ownership entities to add another layer of asset protection. So in my view the holding should not be the management entity.

Again you would greatly benefit to have a strategy session with a real estate, asset protection and tax attorney to discuss your specifics. Most of the major firms that are often mentioned in this forum offer a free initial consultation. 

What kind of policy do you have?

What was the cash value/surrender value of your policy compared to your premium when you started it?

Do you have the illustration that give you the IRR (after all fee)?

There are fees in any permanent life insurance policy. If you optimize it by overfunding it to the maximum allowed, you will probably the first few years have a cash value that will be around 70 to 80% of the premium that you paid. These fee are paying the commission to the agent, the policy underwriting cost, the life insurance cost, etc... This 20 to 30% upfront fee may seems high and it takes a few years to overcome it. However, if you look over the life of the policy (after 20 or 30 years), the average yearly cost will be around 0.25 to 0.75% depending on the products, in par or lower than most mutual fund or 401k costs. So these kind of life insurance products are made to keep for the rest of your life.

I am surprised by your return of 7 to 10%. It seems high to me. For a whole life product you can expect a consistent net IRR in the 3 to 5% range and with an IUL, with a lot more volatility, the average net IRR should be in the 5 to 8% with some years being way above, and some other being at zero.

You overfund a permanent life insurance policy (wholelife or Index Universal Life are most common for this use).

You borrow from your cash value and reinvest it.

As the cash value still compound on the full value, it will on average grow faster than the interest of the loan.

At the same time the money that you borrowed is growing too and if set up properly, you can even deduct the interest of the loan.

So your money is growing at two places at the same time. You get on top of it a life insurance policy that will go to your heir tax free. 

Due to the front loading cost of life insurance policies, this strategy takes a few years to excel as the first few years the fees make it drag behind other strategies. But on the long run, it is far ahead of many others.

You never want to surrender or sell your policy as you will incur taxes. The goal of these policies is to keep them until you die to get all its tax benefits and to borrow out of the cash value when you need money.

@Christopher Lawrence

Using permanent life insurance cash value for real estate investing is a great multiplier of wealth.

I am using MySudo app on my cell giving me up to 9 additional cell phone number.

I can decide which one to mute or not depending on priorities or use of that number.

I have also multiple landline VoIP numbers going to my Pabx. At less than 50c a month per number that is a cheap way to have each business separated, each having its own voicemail but all arriving to the same physical phone. I even have a dedicated number for my rental listing with an announcement detailing all the specifics of that rental before giving them the choice to book an appointment or talk to me.

@Jorge Medina

All HOA have to report their contact info to the state division of condominium website. I don't know if this list is directly accessible on their website but if not you can request it from them as it part of the sunshine public records documents.

I did a refi (no cash out) earlier this year with my credit union on my primary residence. It took 6 months :-(. The only good part is that during that 6 months the rate went down a bit and I was able to lock it down.

I did a cash out on an investment property this summer (at a commercial loan rate with another local bank), it took them 3 weeks, but I had to slow them down as my attorney couldn't keep their pace :-). We closed on it in 35 days.