If you’re a real estate investor planning to buy a house in the next 60 to 90 days, don’t pay cash! I’ll show you how to purchase a house and earn significant returns without tying up much of your own money.
For those who don’t know me, I’m N’Marie Crumbie. After three decades in the real estate industry, I now help real estate investors set up their own banking systems and break free from depending on banks for funding.
Why Paying Cash is Not Always the Best Move
Many real estate investors are primarily concerned with the interest rates they’re paying or their monthly payments. That’s a big mistake. The focus should be on how to make your money work most efficiently. What if I told you that I recently purchased a million-dollar property with less than $1,500 of my own money using my own banking concept? This method potentially offers over a quarter-million dollars in profit. Wouldn’t you want to know how I did it?
Key Considerations When Buying a House
When buying a house, the main concerns are how you pay for it and when you pay it off. Using cash means locking up a significant amount of your own money for the duration of the mortgage. Instead, you can let your money grow and use it as collateral for major purchases, including real estate.
1. Setting Up Your Banking Policy
The first step involves setting up your own infinite banking policy to safely warehouse your money. Infinite banking is a financial strategy that leverages the use of whole life insurance policies as a personal banking system. These policies build cash value over time, which can then be borrowed against for various financial needs without disrupting the growth of the policy’s value.
Let’s break down the benefits:
- Liquidity: The cash value in your policy is accessible and can be used as a loan when needed.
- Growth: The policy’s cash value grows over time, providing you with a continually increasing pool of funds.
- Control: You have control over your money without the constraints and approval processes associated with traditional bank loans.
Once your policy is set up, you can use its growing value to finance your investments. For instance, I recently set up my infinite banking policy before finding a million-dollar property that I wanted to purchase.
2. Borrowing Private Money
After setting up my banking policy, I borrowed $650,000 in private money—often referred to as OPM (Other People’s Money)—to finance the purchase and renovation of the property. Private money loans typically come from private lenders or investors rather than traditional financial institutions. These lenders are often more flexible and can provide faster approval processes compared to traditional banks.
Benefits of using private money:
- Speed: Quick access to funds helps you move fast on lucrative deals.
- Flexibility: Negotiable loan terms tailor to fit your specific investment needs.
- Networking: Building relationships with private lenders can open up future funding opportunities.
The Strategy in Action
Leveraging Infinite Banking Policy Loans
After securing the private loan, I leveraged my infinite banking policy by borrowing $35,000 against my policy’s cash value. This loan was used to cover the monthly interest on the $650,000 private money loan. The beauty of this strategy lies in the fact that while I’m borrowing against my policy, the cash value continues to grow as if I hadn’t touched it.
Managing Interest Rates
The $35,000 policy loan cost me approximately $1,400 at a 4% interest rate for six months. This cost is minimal compared to the potential profit from a successful real estate investment. Moreover, the interest on the policy loan is often lower than traditional loan rates, making it a cost-effective solution.
Profit Realization and Resale Potential
Upon resale, the property’s potential profit is in the quarter-million-dollar range. This substantial profit margin is realized by leveraging both OPM and the cash value from my infinite banking policy. This approach allows me to keep my capital liquid and available for other investments, rather than tying it up in one property.
Common Misconceptions
Many people don’t realize they can use this strategy. They think it’s something only the wealthy can do. However, this concept can benefit people like you and me. Additionally, this strategy can be specially designed for owner-occupant buyers. So, comment “IBC for real” below this blog post, and I’ll send you a one-page outline of the most efficient ways for investors and homeowners to buy a house. This way, you can have more cash at hand to grow your nest egg.
Here are some misconceptions debunked:
- Misconception 1: Infinite banking is only for the wealthy: This strategy is accessible and beneficial for anyone looking to manage and grow their finances intelligently.
- Misconception 2: Private lenders are hard to find: Networking with other investors, attending real estate forums, and joining investment groups can help you connect with private lenders.
- Misconception 3: It’s complicated: While it may seem complex initially, once set up, the infinite banking policy becomes a straightforward and powerful tool for financial growth.
Conclusion
By setting up an infinite banking policy, leveraging private money, and understanding how to effectively manage loans, you can purchase properties without tying up your own money and still make substantial profits. This approach not only allows for greater financial flexibility and growth but also positions you to take advantage of more investment opportunities as they arise.
