Cash Flow Banking For Real Estate Investors

If you’re a real estate investor or an aspiring investor, you know that one of the biggest challenges is access to capital, and the second is access to financing. Before you can buy a property, you need to have the deposit available and the ability to finance the deal – if you don’t, you’ll end up watching great investments pass into other’s hands.

What if you were to find out that there could be an alternative finance option that many don’t talk about, especially with respect to real estate?

There’s a way that you can utilize an existing life insurance policy to invest. How? Through a strategy called cash flow banking.

What is Cash Flow Banking?

Cash flow banking is an innovative financial strategy that allows individuals to utilize their existing life insurance policies to create cash reserves and make purchases or investments.

Cash flow banking comes hand in hand with incredible benefits. Unlike traditional loan arrangements, those using cash flow banking are only required to pay back interest – never principal (unless they choose to) – on withdrawals from a policy’s cash value balance. This strategy essentially affords investors access to capital without the strenuous approval process from banks or other institutions. Furthermore, it offers considerable advantages over typical borrowing options and provides more freedom in leveraging funds towards individual goals.

Cash flow banking can be used to create greater long-term financial stability. Through the purchase of a life insurance policy with a guaranteed death benefit, users can safeguard their assets against market volatility and earn returns at higher rates than most bank savings accounts.

What kind of life insurance policy do you need for cash flow banking?

If you want to build cash capital in an investment, you must purchase a whole life insurance policy instead of a term life insurance policy. When considering life insurance, it is crucial that you are aware of the limitations of term insurance. With term life insurance, you will only remain insured for a set number of years. If you outlive this period without passing away, your family gets nothing in return, and any chance at renewal likely carries higher premiums due to age or health factors. Whole life insurance policies have no ending time frame and give policyholders additional living benefits that are not available with traditional term plans – making them worth exploring when searching for comprehensive coverage solutions.

Whole life insurance policies usually involve higher premiums than term plans, but they come with a wide range of additional benefits that make them well worth the cost. In addition to providing basic death protection as regular life insurance coverage does, whole life insurance also allows you to build substantial cash value over time and create greater financial stability for your family even after you’re gone. This option gives policyholders an opportunity unique among other types of investments – one which can be incredibly valuable in creating long-term wealth while still delivering traditional peace-of-mind security along the way.

To begin cash flow banking, one must select the appropriate whole life insurance policy. The inclusion of dividends and a paid-up addition rider are required for building up liquid reserves that can be used as cash flow in the future. As premiums are paid over time, the associated cash value accumulates within the policy, which can then be accessed to finance various investments or expenses, such as real estate investments.

If you already have a whole life insurance plan that you’ve been paying down, you could be sitting on a jackpot of cash flow ready to be used to start investing.

Be your own bank with cash flow banking.

If you already have a whole-term life insurance policy, you’re already well on your way to becoming your own bank. If not, it’s time to get in touch with your financial advisor or an insurance broker.

Once you’ve had a policy for some time (like a decade), you’ll have accumulated significant cash reserves. So now, when you need a loan or some extra cash to make an investment, you can turn to your policy instead of a bank.

Tax incentives in the cash flow banking method.

Whole life insurance presents an attractive and tax-advantaged solution for estate planning. Not only is the death benefit paid out free of taxes to your named heirs, but any loans taken or dividends earned from a whole policy will also be exempt as part of this unique financial instrument. This can make it an ideal option when making long-term plans for securing future wealth.

Let’s make that super clear, with cash flow banking, you’re getting tax-free capital.

Is cash flow banking too good to be true?

It’s not too good to be true, and it’s not a scam. Cash flow banking is a completely valid, if unique, strategy for obtaining loans and investing in real estate.

Keep in mind, cash flow banking is a long-term strategy. You can’t expect to purchase a policy today and take out a loan next year. It takes years or even decades to amass a large enough sum for borrowing purposes such as taking out a loan for a house down payments. Therefore, it is imperative to remain consistent in making your monthly contributions and keep sight of that ultimate goal – financial freedom many years ahead!

Cash flow banking for real estate investing.

The amount you can borrow against your life insurance policy will depend on your policy coverage and how much you have paid into the policy. Everyone will have different preferences regarding their policy and how much they can afford with each monthly premium payment. Therefore, it’s best to check with your insurance company about how much you can access.

Cash flow banking offers an incredible opportunity to take out loans that can either fund the initial deposit or the entire purchase price of an investment property. For example, perhaps you’ve already retired, and a traditional bank won’t lend the funds to purchase real estate. In this situation, cash flow banking could be an excellent option.

Active and aspiring real estate investors can use cash flow banking to essentially self-fund their real estate loans at competitive interest rates. And the best part is that they can choose never to repay their principal and only make interest payments.

Can you take advantage of cash flow banking to supercharge your real estate investment portfolio?

Our Recommendations:

Book: What Would The Rockefellers Do?

Whole-Life Insurance Agent: Amanda Neely 

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