How to Use Cash Value Life Insurance for Real Estate Investments: Example

So say you have one of those policies and you can borrow $100,000 from your cash value life insurance. So for this kind of loan, you only pay interest. Your cost every year for borrowing that $100,000 is going to be $5,000 per year. And it was 8% cash flow per year. So the cash flow projections from your investment will be $8,000 per year. Now you have a couple options. You don't have to pay that 5,000, so your net cash flow every year would be 3,000. So that's $15,000. The nice thing about this is then when the property sells, so in this examp $60,000, their equity proceeds from sale. So the $100,000 that they borrowed, it gets to go back to pay back the cash value life insurance loan. So we're going to say what we get to keep is that $15,000 of net cash flow and then the $60,000 your equity proceeds from sale. You're going to take the $100,000 and give it, pay back your, your whole life insurance loan. So you've made $70,000 by borrowing from your cash value life insurance and making an investment in an apartment syndication.