Real Estate Strategy - Life Insurance Policy

Offering a Life Insurance Policy. . .

. . . is another strategy the real estate investor can use to persuade the seller to play lender in a transaction.

Trust between Buyer and Seller is the key to all win-win Real Estate Deals.

As seen in the case of the blanket mortgage, the key is building trust. What if you say to the still somewhat incredulous seller,

You might say to the seller,

"Since you are permitting me to pay off your equity in cash over a period of time, how would it be if I took out an insurance policy in the amount of the note and made you the beneficiary?

That way you will feel secure that the note will be paid off no matter what."

This technique is not usually necessary. But it has proven to be the nudge needed in some deals.

Again, it is an inexpensive way to build trust especially when the seller just cannot quite see it your way and needs just a bit more persuasion to agree to your offer.

The cost of such policies are usually small and the costs can be redeemed at a later time if you flip or refinance. Thus the term, "Nothing Out of Pocket" Deal sometimes called 'Nothing Down' Deal.

We all know there is no such thing as 'Nothing Down' as there are always cost involved in Closing, Transfer of Title, etc etc.

Don't get me wrong I have done a Nothing Down deal with money take out at closing, so I can say I was paid to buy the property.

(This Advanced Technique to be covered at a later time).RT-RGA