Using Life Insurance to Buy Real Estate - Expert Edition Episode 15
Did you know that it was possible to tap into your permanent life insurance policy to buy real estate? Our Life Insurance Expert Acquania Escarne breaks down how she has been able to leverage her life insurance policies to purchase rental properties, syndications and even hotels! She shares how you can too and for far less money than you think.
About our expert:
Acquania is a financial coach, freelance writer, and independent life insurance producer with LifeTyme Financial Group, LLC. She is committed to helping people find financial freedom and build wealth. As a financial coach, she equips her clients with "outside the box" finance tips, debt payment plans, retirement planning, and more. With her advice clients are able to meet and exceed their financial and personal goals.
Her coaching is individually tailored to address all financial situations. Also, through her finance blog and podcast, The Purpose of Money, she shows women how to invest and save more so they can live a more fulfilling and prosperous life.
Acquania's passion for personal finance and investing began when she was in high school and her father gave her a copy of Rich Dad, Poor Dad by Robert Kiyosaki. At 16 years old, Acquania opened a Roth Individual Retirement Account and has been seeking financial independence and early retirement (FIRE) ever since.
Schedule a Free Consultation with Acquania
Resource Mentioned:
Davonne Reaves
Hip Hop Hotel Broker
The Purpose of Money
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TRANSCRIPT:
[00:00:00] Naseema: Welcome back. My Financially Intentional People. I am used to have my good homie, Acquania Escarne, joining us again as our life insurance expert, and today we're just gonna dive right how she became a black woman hotel owner, and how she was able to use her life insurance to facilitate that. So, hey Acquania. Cuz I know people are gonna be like, what? But anyway, , I'll let you just share your story cuz I thought you were just goodhead it. So let's
[00:00:31] Acquania: go. All right. So I actually started my journey into expanding my real estate portfolio with life insurance in 2016. But I have to start at the beginning where before my husband and I got married, we met with a financial advisor and we got our finances on the same page. And so a part of that discussion was life insurance. We knew that we were committed to be with each other, and she explained to us the importance of getting life insurance while we were young and healthy.
And so we decided in our late. To get life insurance and at that time with no kids and bills that we can manage an extra cash flow. We opted to get permanent life insurance, which is the type of life insurance that doesn't expire, but it also allows you to bill what we call cash value. So I wanna be clear that.
We met with the professional, we reviewed our finances, and we had the cashflow to do this for most people, term life insurance, the type of coverage that expires, that also gives you a lot of coverage for less money is the best solution. But if you meet with someone and determine that you can afford permanent insurance, it's a great way to get.
Make sure that you have insurance that doesn't expire,
[00:01:49] Naseema: You are that person that people can meet with.
[00:01:52] Acquania: Yes, I am that person. So you can call me, you can talk to me, but just know, okay. Just know permanent insurance. always costs more than turn because it's guaranteed to be paid out, and the insurance companies are gonna charge a little bit more for that a hundred percent payout that you're gonna get.
But it's a great option for those who can afford it, and it's also a great strategy you can leverage later. So my husband and i's. Started with those policies in our late twenties and we let them grow for a few years. Rented out our condo while we lived abroad for three years and came back with enough money to really buckle down into real estate.
So we used $40,000 from a life insurance policy to purchase property in 2016, in addition to helping my mother-in-law get a condo. And then we also purchased our dream home, so we. That life insurance money to leverage three properties in addition to some of our savings. And I wanna emphasize this because unlike money from stocks and other investments you have where if you cash out some of that money by selling, You may incur some taxes, right on net capital gains.
We actually were able to take from a life insurance policy and when you take money from life insurance, it's tax free. And it's also yours, right to leverage. So we were able to use tax-free dollars to get into real estate investing, which is super important. . So that's how we bought three properties in one year.
And it really helped us expand not only our ability to create passive income, but it also expanded our opportunities, right? Because this is a space that most people aren't doing. They're not leveraging life insurance to invest in real estate. They don't realize this is tax-free dollars that should use.
But
[00:03:38] Naseema: let me just emphasize, let me just clarify, I should say mm-hmm. . So when you're saying you're u that you're leveraging that money mm-hmm. . So you're taking that money. Are you borrowing that money, meaning that you have to pay back that money, or is it just like it's just your money and you're just spending it?
[00:03:53] Acquania: Mm-hmm. , that's a great question. So you have two choices. You can withdraw it permanently, which means you will not be able to return it. And in those cases, any gains are taxable, but any of the premiums you paid are not. So most of the time you'll only pay a small portion of taxes on the gains. However you can also borrow, right?
So borrowing is when it's completely tax free and it doesn't have to be paid back, but you can choose to pay it back. And if you do, then you can just use that bank again, right? So some people will call it infinite banking or a strategy where you become your own bank, where you can take money out, you can put it back at any type of pay scale you want to, whether it's monthly or never.
Never again. . People think that's crazy. They're like, how do you not pay it ever again? And I said, well, that's how it works. But there is a catch when you borrow money and you choose not to pay it back. They do end up taking it out of the death benefit. So if you have a hundred thousand dollars death benefit and you took out $20,000 when you pass away, your family gets 80,000 instead of a hundred thousand.
So they do get that money back in some way. A lot of times I tell people this is a strategy that allows you to use your life insurance money while you're alive and after you're dead. As long as you still left enough money for expenses and for your family, then they're still good, right? 80,000 is still better than zero.
and it allows you to leverage 20,000 while you are alive. So this is how rich people normally leverage tax free dollars in retirement or while they're alive. And what I like about this strategy is it has nothing to do with your income. You know, a lot of people, I love Roth individual retirement accounts because that's how I started to save for retirement.
But honestly, a Roth has income limitations. You know, once you make too much money as a single person or a married couple, you are no longer eligible to contribute to Roth IRAs unless you do the backdoor strategy, right? So a lot of times you find yourself in that high six. Six figure income and not that many tax-free buckets.
So life insurance can be another tax-free bucket for you. And so that's another thing to think about. And me personally, I love tax-free buckets. I wanna have as many as possible and you can have more than one life insurance policy. So I've chosen to leverage life insurance and Roth IRAs, cause I still have the one that I have from 16 as my.
To increase my tax free bucket. So that's another thing. Yes, yes, yes. I
[00:06:27] Naseema: love that. And a lot of people don't know that you can actually take contributions early from your Roth ira up to how much you contributed. Mm-hmm. or up to the gains if they've been invested for five years. And that's a way that people in early retirement usually can tap into retirement funds.
Before. So just a little nugget there. Yes. Mm-hmm. ,
[00:06:49] Acquania: yes. Yes, I love that. And you are allowed by the I R S to take from a Roth IRA if you need to in the event of hardship, emergency, or to fund your education or to buy real estate. So your Roth I RRA can also be. Where you get a down payment for a home, depending on how long the money's been in the account and the reason that you're taking it out early.
But that's a completely justifiable expense. And if you check out irs.gov, you'll see a list of other eligible reasons to take from a Roth before you're 59 and a half. And those are all exceptions that you can use for yourself. And I would say don't be afraid of an audit, cuz of course in that year I do all these things in 2016 and we did have an I R S audit, but it was really simple.
They send us a letter, they said, Hey, we noticed you took money out of this these different accounts. I did also take money out of a Roth IRA that year. Not too much, but. and they mm-hmm. and all I had to do was show them. Mm-hmm. , that I had that account from 16, and here's the proof of the transactions.
Mm-hmm. that we used to put money in it. And here's the proof that when we took it out, that was purely contributions and gains that had been there for five years. And the IRS was very satisfied with the documentation. So this is really important for you to remember, like whatever you do, just have documentation, keep good records on all of your.
That's really important anyway. And just be prepared that if the IRS asks questions that you provide, the documentation that justifies the actions you took and then it just goes away. They, so
[00:08:23] Naseema: they just need to see a paper trail. A lot of times people are so afraid, but they just need to see that that is, there's some kind of paper trail there cuz they can't access it, but we can access it.
Exactly. You just go online, you go to call Vanguard for ca de say, Hey, I need this paperwork, and then, and then send it and it. ,
[00:08:40] Acquania: yeah. Mm-hmm. . Yeah, absolutely. And that's all I had to do. And and I would say even if you decide to move your money, so the Roth IRA or the company I had my Roth with at 16 is not the company I have it with now, but I have all the records of the rollovers and, you know, the, just the different changes I did to go to an account that made sense for me.
So, it's okay to move your money, it's okay to use your money, but definitely keep good. But that's how I started leveraging life insurance to invest in real estate. And then later I decided I didn't like toilets intended. Yeah. Do you wanna talk about that now? Talk about that . So, truth be told, one of the properties we purchased was a rental property in Philadelphia, west Philadelphia, to be exact and
I realized that I did not like toilets and tenants after facing one eviction and successfully getting that person out of the house who was not paying rent. After a few months, we put in another tenant and then noticed a pattern that, hey, Christmas is coming. Rent is short, what are we gonna do? And I really knew in my heart of hearts that I did not get into real estate investing to evict people.
And I knew that that was something that, you know, to be your landlord, that's something you have to be prepared to do. And so my dad told me, he said, look, if you can't kick out your mom from your own property, then you don't have the skin to be a landlord and you should reconsider, that's a word, . And so I started asking , that's right, right.
My. He's super like straight too. He's in military and he's just like, it's black or white for me. Boo. Like kick her out. Mm-hmm. or lose money. Right. So in 20, when did we sell that house? I think it was 2020. Oh no. 2019. Yeah, 2019 we sold that rental to another investor. Made the, a really decent cut even.
But then I had this income oil cash that I needed to reinvest, and I was preying on, you know, how do I stay into real estate investing without dealing with toilets and tenants? Because I, you know, some people would've been discouraged. Some people would've been like, real estate's not for me. I got burned
I'm giving up and I was like, no, I don't wanna give up because I know that real estate is a great way to make money, but I just need to find the way that makes sense for me. So I really asked around my network, wow, can I get into real estate? In real estate and not have to deal with people, not have to deal with maintenance and.
Interestingly enough, a coworker of mine told me about apartment syndication and she was just like, you know, I do these apartment syndication deals. Mm-hmm. outside of work, that's my side hustle. Mm-hmm. . And I was like, what is that? So apartment syndications are basically investors who buy apartment developments, you know, with 100 units or 200, 300.
They're the big subdivisions where you might have lived in in the past in an apartment, and the the manager manages the tenants and the toilets and the leases, but the investors benefit from the profits and the proceeds. So she gave me some insight into how you can be one of those investors. Most of the time you have to know someone who does the.
You also may need to be an accredited investor to invest or know someone who is accredited and you are a, what they would call a friend or a non-accredited investor who can still invest in a deal because you have some type of mm-hmm. connection. Right? So I learned about apartment syndications and I was like, oh, I wanna get into that.
And then guess what happened? 2020, there's a. . The government did allow like an exception in that year for people to borrow from their retirement assets if they wanted to and have a longer term to pay it back or to, or to be able to take money to survive. But mm-hmm. , there were no deals. Right? So I had.
Money from the house that I sold in Philly. I had the ability to access retirement funds from my job if I wanted to , but I had no deal. Right? And I don't recommend you take money out of anything that's generating income, even if it's passive and interest if you don't have a deal. So I kind of waited until I found something and my friends who do apartment syndications never found a big deal in 2020.
but they introduced me to someone else who does hotels. So Instagram is an amazing space where your Instagram besties will introduce you to other Instagram besties. And in this case, a friend introduced me to Devon Reeves and Jessica Meyers, who have a company called Epic Collective. They help people invest together in.
And I initially was like just amazed by the topic and the concept that I had them on my podcast, the Purpose of Money Podcast, and we recorded episode 26 where we talk about investing in hotels. But honestly, I was like, you Naima, I was just like, this is a really interesting topic. I'm gonna talk about it on my show, but I don't know.
Mm-hmm. if this is for me, right? So I hold. So I decided like, hey, like let me make friends, right? Not just have them on my show, but let's make friends and see if when we foster this relationship, something else comes out of it. So, believe it or not, I signed up for their email list. I got on their email and they sent an email like a month after we recorded.
About a Hilton home, two suites opportunity. And I was like, oh my God. Like they don't just say they get people in the hotel, right? So they do it , and here's the deal, right? So I saw the opportunity in an email, asked for the proposal and the prospectus, and then went for it. I would say September. I told them I was interested.
October, I sent the money in Octo. At the end of October we closed. And like the rest is history. But that is my long story short on how I went from rentals to hotels. And now I do have apartment syndications. But it took another year, 2021 before I could find a good apartment syndication deal. And I loved them both, but
[00:14:58] Naseema: this is all like started.
well, did you get out of like just rental, like buying hold rentals all together?
[00:15:08] Acquania: Mm-hmm. . Okay. Most part, I still have one. Okay. And it's still rented and mostly mm-hmm. . Cause the tenant's a good tenant. They love the house and you know, why mess up a good thing? But. Everything else we got rid of because I just didn't, I didn't, I didn't have the patience.
Mm-hmm. , I didn't wanna deal with it. And I learned in my process of getting into hotel ownership and into apartment syndications, that the amount of money that I spent to buy a rental. , I could have had ownership in a hotel. And so that's was the eye, awaken eye aha moment for me, right? Because I was like, wait, the down payment, cuz I live in an expensive area.
DC Washington, DC is expensive and most people, rental properties are an investment and the bank will consider. You know, the need for a larger down payment. So they're, sometimes they want 20%, unless it's multi-family and you're living in one of the units and you can get a FHA loan. Right. And then maybe then you'll do three to 5%.
But for me, who had a house with my family and didn't plan to move into anything, just to be able to rent it. I needed to think about the cost of 20% down versus that money into something else, and they were coming out to be the same, if not less, right? Because sometimes you can partner with other people on these joint ventures that you can't necessarily partner with.
In the same way if you're doing it for real estate. So that's what happened. And so I'm gonna go ahead and put this out there cause I know people ask all the time, how much does it cost to get into hotel ownership? How much does it cost to get into apartments indications? And I will say it depends.
They are independent deals and how much money needs to be raised depends on how much money they need for closing. So in the hotel that I did, for example, you know we were taking over the mortgage from the previous owner, so that's how much lower fee. You would just have to come out with enough money to take over the payments and, and some money to kind of.
Reserves for reserves for the property. So in 2020 you could find a good deal where 25,000 would be the minimum to get into some hotels, whereas after 2020 when the market was, y'all know, at its height, real estate was really competitive. People were like struggling to find houses. You found yourself seeing the minimums.
So for apartments indications, for example, by 2021, they went from 25,000 minimums to 50,000. And there are some out there that the minimum's a hundred thousand or a million. So it really depends on the deal. What I would say is just continues to be on the email list of those who advertise these deals, cuz I do that on my list, for example.
And you'll never see them on social media. Let me say this again. You will never see them on social media. . And the reason I say that is because there's a lot of rules. There's a lot of s e c rules about mm-hmm. , who mm-hmm. can know about the opportunities and who can, who can put money into them. So we can't advertise deals like this on social, but we can advertise them to people we know.
Mm-hmm. on our email list. Or to our friends and family who may know people who are eligible investors. And then from there you can respond to the email. You can listen to the webinar, you can ask questions, and then you can decide if that investment is right for you. So I want you to know like the best place to start.
In some cases it's to follow other people who do what you're trying to do, like hotel investing or apartments syndication investing, and then get on their email. Get to know them because you'll be investing with them, right? So you wanna know who you're giving your money to and who you're in bed with, per se.
So that's how I got started and that's about how much it could cost. But like I said, if your deal requires more capital, like say if I was doing a hotel that we're gonna build, that's a much, much higher investment than one that's already existing. So a building, a hotel might have a much higher.
Buy-in. Right. But as an investor you do get equity. Occasionally depending on the deal. You will also get hotel benefits, like free stays at your own hotel, discounted stays at the chain if you invest in a chain. And then you also get access to profits, right? So every deal's different, but sometimes you will get quarterly dividends based on the performance of the business.
Because remember, a hotel, you're not just buying land, you're buying an operating. That sells rooms, that sells food at the market. Breakfast may have a restaurant, may sell internet. Mm-hmm. , these are all mm-hmm. income streams that eventually will go back into the business and to the investors. Or some deals you will get quarterly monthly distributions, like for my apartments indication for example.
we get monthly distributions. Mm-hmm. based on the rent collected. So you have people who live there, there, as long as they pay their rent, then you get a portion of the rent too. And that could be paid out as often as monthly. Yes. Makes sense.
[00:20:14] Naseema: This is all good stuff, but I kind of wanna go back to the fact that, you know, you just like.
First of all, a lot of my current friends that I have are people that I aspire to, are people that, you know, I wanna be on the same page of financially. And the way that I made those relationships was, you know, first just. Finding them, staying in contact with them. And then before you know it, we're friends in real life, right?
So it just is like, who my network is, right? My net worth. And they say, of course your network is your net worth, right? And so network, we were like, well, how do you get in the rules with these people? I just make these people my friends. And that's what you did. You, you had this person on your podcast and you was like, these are, this is like a very interesting person.
I'm gonna go ahead and follow her. It's not like you stopped her, you were on her email list. Mm-hmm. , you started to engage mm-hmm. and you just became visible in the community. And once you become visible in the community, then people are like, oh, okay. Like, then you start building those relat. That, you know, these people actually are friends in real life and that opened up a whole new world to you.
Mm-hmm. , because initially the apartments indications didn't work out, but they were just like, but we got this situation going on. And I actually remember listening to that episode that came out with the hotels and I was like, so, And and then talk to you about it. You were just like, yeah, it is really not that hard.
But it did seem intimidating. But if I hadn't dived a little further, I would've thought that it was like way outside of my reach. I mean, like who talks about owning hotels? Like nobody owns hotels. Exactly.
[00:21:57] Acquania: But the thing is, like you said, you put it in.
[00:21:59] Naseema: In perspective, like it's the same as you would put down on any kind of rental property, except now you got all these doors and you have all these other revenue streams because of the business model of a hotel.
So I really love that. I also love the syndication. Deals because you, you are opened up to, you know, bigger properties. You're not dealing with the day-to-day management and it's just like you're investing. Mm-hmm. , and like I said, the investment. And like you said, the investments can be just as small as just you buying one individual property.
However you're reaping these quarterly or monthly rewards. where it's almost like passive income, but you're still in real estate, but you're not an active landlord. Mm-hmm. . So I just wanted to recap that for people that might not have caught it, , because it was just like so many gyms in there and, but it all came back to mm-hmm.
you having access. To resources and not a lot of resources. And the thing is, most people
[00:22:59] Acquania: have access to these
[00:23:00] Naseema: resources. They just don't know how to tap into it. So I just wanna ask like from a life insurance perspective, like do you continuously buy life insurance policies or do you just have like these life insurance policies that you've had for years that you can access cuz you've, you know, done the infinite banking where?
Access the resources you hated back? Like how, how much in life insurance policies do you actively hold ?
[00:23:29] Acquania: Both. So I, so I'm a huge fan that you need a combo strategy, so don't get it twisted. I do have a term policy that's my big, big mamma jamma, right? Like that's the. Highest one. That's no cost for me cuz I also got that while I was young and healthy.
But it's going to give my family, you know, the figures they need to finish paying off the real estate. We have kids in college if they happen, if I pass away too soon and other things right. But I've used the cash value policies as a means to have this bank created, got in at 25, so able to do it at a cheaper cost.
And leverage it. But what I've been doing is using, you know, making sure you have what you need. So my family knows if something happens tomorrow, they're set, they're taken care of, houses can be paid off, college can be paid for, and what I rec. , what I currently contribute to the household can be covered for 10 years.
Right. Because at the end of the day, that is number one priority and for some people you're gonna f make that solution through term insurance. But in my case, I was able to afford both term and permanent in order to make. ends me if I die too soon. But I actually have a plan. I wanna get another policy.
Before my 40th birthday, it's nothing necessary about 40 because that's not actually mm-hmm. a year. Policies jump in cost, but it's a milestone for me that, hey, I wanna get another policy before 40 and this is something that I wanna do to build another bank, another access for myself. And it'll be used to fund even more additional tax-free dollars in the future.
But you can do one policy and like I said, keep taking the money from it, putting it back, taking the money from it, putting it back. Or you can do multiple policies, right? I'm a fan of get as much insurance you need as often as you need it. And there's a strategy in the life insurance space. It's called the.
Policy structure where if you choose to do a lot of term policies, you will get new ones as your existing terms are about to expire. So that way you never run out of insurance when one policy expires. You already have the other one in place and you're stacking them in that way while you're still insurable.
other thing you can do that I recommend is, Permanent pol well getting term policies that are converting are able to convert to permanent insurance. And the reason I say that is because term is cheap, right? But when you lock in your term, you are also locking in your health classification. So even if your health gets worse, you are still able to get permanent insurance later.
And when you convert it, the companies don't ask about your. , they only take in consideration your age and they will quote you a price based on your age. And so that's another way to protect your insurability is like getting a whole bunch of term that can convert to permanent when you're ready. And then you can stack your term policy.
So you, you know, let's say you have a 10 year policy, for example, and you get another one at eight years right before your term's about to expire and. You can get a permanent policy at the same time if you can afford it, and that way you'll have one policy that will expire and one that will never expire.
So, for example, another strategy I may use is if I meet with you and we're like, look at 60, your house is gonna be paid off, but then your kids will be grown and maybe at that point you wanna leave money to your grandkids. Let's get a term policy that'll cover your mortgage college and your salary until 60.
But then at 60, let's drop the million dollars policy and let's just. The permanent one, which let's say we get them at the same time and it's 250,000. Right? So when you were 30 and you got a million dollar term and a $250 permanent, $250,000 permanent policy, you had 1.2. Million dollars in, in coverage, right?
But by 60, that term drops off. That money returns to your budget. But that $250,000 one, not only is it still there, you got it at 30 when it was super cheap and now mm-hmm. , it could be fully paid because there is a strategy where, one, you make your payment spread out while you're working. , you don't have to make payments when you're not.
So a lot of my clients, I will stop their payments into life insurance when they hit retirement, and we will let that money continue to grow. They can use some of it in retirement if they want to, and then they still have this death benefit that goes to their family when they die. But the other cool thing is,
Some companies, once you've made so many payments, they start to give you more of that money back in the death benefit. So you might sign up for a 250 K policy at 30, but by the time you're 70, that could be a 300, $400,000 policy because now you're getting money back in a death benefit in addition to the cash you've built up in addition to the interest you've earned.
So there's so many benefits to permanent insurance that everyone doesn't. But they don't do that for term, your term policy's not gonna get extra money added to it. You're literally just paying for whatever you signed up for. But when you have permanent insurance and you've made payments for 20 years, you start to get some of that money back in cash value and in an higher death benefit.
So you leave your family more money than you even thought something. Yeah. And that's something, another
[00:29:02] Naseema: thing to consider is that you can actually convert. Part of your term, like you don't have to convert your whole term policy over, you can convert part of your term. Mm-hmm. over to a whole life policy.
Mm-hmm. , I know I get the notification like once a year, like, Hey , you know, you have this benefit. You can convert that. So that's also a strategy as well. Right. So how does that work? Mm-hmm. .
[00:29:27] Acquania: Mm-hmm. . So you A lot of times mm-hmm. , it depends on your company. It depends on the contract, but a lot of times you do just fill out a piece of paper or make a phone call and say, I'd like to convert.
And they, like I said, they don't ask you medical questions because that's one of the deals you made is, I won't have to do medical, but you will allow me to get this policy. Some companies will let you get up to the amount of insurance you have in terms some companies, like you said, will let you break off a.
and have the policy and so that's permanent and keep the term. But it really just depends on the company and how they do it. But that's a great strategy and that's why I start people with term that they can convert so they have options. I think that's the key is to have options and then when you can afford the permanent policy.
And that's the thing
[00:30:14] Naseema: is like. , it's if you lock in a term policy really early, it's very favorable for you to do all of these things. And I think a lot of people just want to wait. And I would say like term. Mm-hmm. , for example, I got my term policy when I was 36. So I still really, really late. Right? That's like years and years after you got yours.
Right? Love you. Years after you got your policy, but for a $2 million policy, I was paying $700 a year at 36. So it's just like, it's still very affordable. . But had I locked that in when I was older? Yes. I mean, when I was younger it would've been even cheaper than that and I, you know, it's, that's hella cheap.
Yes. Does that makes a hundred for 2 million. Yes. , that's hella cheap. Right. But what that allows me to do, like mm-hmm. , it says like, if I can take a portion of that, like I have sense broken off 500,000 of that and put it in a term to 80 policy, which is a little bit different we haven't talked about, but which is like guaranteeing it up to, You know my policy up to the time I'm 80 years old, which is almost a whole life policy.
Mm-hmm. , but cheaper because it's still a term policy. Mm-hmm. . Mm-hmm. . And then, but then I've also been able to add onto my policy, like a whole life policy, and then I can still add onto that. Mm-hmm. , because I. I have these benefits because I locked in that rate at 36. And so I like that stacking methodology and I actually think I'm gonna look at kind of rolling off even more of my benefit into a whole lot.
Mm-hmm. Into a permanent policy and , like you said, there are so many benefits to permanent policies, but what I, what I always am like caution people about is that. There are so many benefits, but then there are so many people in the insurance space that try to sell you into products that you don't necessarily need at that time.
That is super duper important. Mm-hmm. that you know the person that you're dealing with and that they are credible. So that's why I have a K here because there are so many people that are lying. MLM and you know, like they're selling. Products that you probably don't need, right?
[00:32:39] Acquania: Yeah. So, mm-hmm. , I'm no shade.
I'm an independent mm-hmm. life insurance agent and everyone out there, you know, do your thing. But independent means I'm not tied to one company. I can shop around, I can look at the products and the companies that are best for you. But there are other people out there that they work for a specific company, they don't.
Stability. They can't necessarily compare and shop products and they may work with a multi-level marketing company that sells life insurance. Now, I wanna be clear, what they're selling you is life insurance. They're no one can legally sell you. . Anything else other than life insurance, if that's what they sell, right?
We get licenses, we take tests, we are authorized to sell it, but everyone is different. All the products are different. So really make sure you read the fine print, understand what your you can and cannot do with that policy, and make sure it meets your needs, which is covers your family and provides for them when it's most important.
Right. . Just know that you know it has to be a good fit for you. You have to trust that person because life insurance is not a one and done thing. This is someone who you should be connecting with on an annual basis to make sure that you have enough insurance or if you get a divorce, that you take off the beneficiaries that no longer should have access to this money.
And if you need to increase your insurance because you're bringing life. World. Those are all the things you wanna do on a regular basis with your agent. And so I tell people it's a lifetime commitment because God willing, I will know you as long as you know me, because this policy will cover you for the rest of your life or for the next 30 years of your life, or until you're 80 years old, like you said with your term 80 policy.
So trying to look for someone who you feel like that's the relationship you're gonna build and you have the ability to do that together. But there are people who, you know, they work with companies and that might be the first access point they have to get into this space. So I'm not throwing shade at anyone who's with MLM or other companies that are not as flexible.
But you can ask those questions. You can ask an agent, are you a captive agent? Do you have the ability to shop rates? Do you have more than one company that you are looking at for me? And then ask them why. You can also ask, what is your commission? Is it based on. What you sell me or how much you sell me, or is it the same?
You know, I'm always fully transparent. My commission is the same with every single company I work with. So I don't have an incentive to do business with one company over the other. My incentive is to provide you what's best for you. But there may be agents out there who get a different commission based on the product, right?
And they may push one product over another one because of that. But those are questions that you have for right to
[00:35:32] Naseema: ask. Yes. I love that. I love that. So let's just summarize here. Like if somebody really wanted to get into syndication or owning a hotel what are things, what are the steps that they can take and say they have access to a permanent policy, which they can tap into.
Like, can you summarize like what those steps would be? Mm-hmm. .
[00:35:53] Acquania: Yeah. Kind of do it. Yeah, absolutely. And so I also want you guys to know, like if you don't have a permanent policy, don't feel like you can invest. They'll take your cash too. And I also as an entrepreneur, I do have a solo 401k, which is a retirement account for entrepreneurs or those who are, who have businesses and self-employed.
And I leverage that to do real estate deals too. So I pay myself for retirement, right? But then I take that money and invest in real estate. Oh, wait. I should also
[00:36:21] Naseema: mention to you, you can have a self-funded IRA as well. If you're, if you're,
[00:36:27] Acquania: yes, yes. You can have a self-corrected ira,
[00:36:29] Naseema: someone. Instead of just putting it into a traditional or a Roth ira, you can have a self-directed ira, which you can use to invest too.
So just put
[00:36:37] Acquania: that out there. Yes, yes. Mm-hmm. . Yes, absolutely. Yes. And mind you, the solo 401k I have, I, you know, was a nine to five employee forever and still have this account too, but I have access. Because I also have a business, right? So find your money, whether it's life insurance, solo 401ks, self-directed IRAs, or your cash, find your money and then find your deals.
So follow people on social media life. Myself Davon Reeves is at Davon, d a v o n n e. Reeves, r e a v. Yes. She's the hotel diva. We are investing besties, and she's one person I trust in this space since she's done it for 15 plus. You also have the hip hop hotel broker. Amari is in this space, really popular, and he helps leverage deals all the time.
But those are the black people in this space that I truly trust, and I think that you need to find people who are already doing it. Get yourself on their email list so you can see the deals as they come through and you can see what makes sense to you. But they should be, if they're not immediately accessible, they should have a team that is, or someone that you can talk to when you are ready to proceed.
And definitely look at the documents. Like look at the prospectus, look at the proposal, the timeline, the plan. You know, a lot of times you are going to be purchasing apartments and hotels that need work or need new management or need some type of fixing before they are as profitable as they could be.
And that's where the return comes in for the investors. So make sure the plan makes sense and make sure the people who are pushing this plan have the experience to execute it and the ability to follow through. And last but not least, if you do invest, make sure this is money you can afford to invest. So I didn't mention this, but most deals you're gonna be tying up your investment for three to five years, sometimes as long as seven.
And although you will get that cash flow throughout ownership, the biggest return comes at the point of sale because that's when you're gonna get that payout. Two to three times your initial investment in addition to whatever you received quarterly or monthly. And so you have to make sure this is not money you're gonna need in six months, and this should definitely not be your last dollar or your emergency savings, okay?
So you have to have a timeline where you can afford to give this money to the deal. While the hotel's being renovated or while you are enjoying profits as an owner and prior to the time that you sell to the new owner. So that's a timeline. The money has multiple places it can come from, like we talked about and last, you can always.
Vet the deal with your financial professional or an attorney or someone else you trust who's in this space and who has done it before. I did due diligence on all of my opportunities before I turned over $1, and I think that you should do the same. So you ensure that your money is going. Who
[00:39:34] Naseema: do you use to do your due diligence?
[00:39:39] Acquania: So I use my network. Boo ? Yes. My network, Davon is one of my people cause I've invested in deals outside of her. But there's also a couple consultants out there. I'm not gonna drop them because they do like to hear about the case before they take it. But you can contact me. I'll drop my information.
I'm on Instagram at the purpose of money and I do offer free consultations if your deal makes sense. And the consultant is accepting clients at that time, I'll send you their way. They may charge a fee to review the opportunity, but that fee could be worth it if they save you from losing thousands. So please do not get overwhelmed by the cost or the process because that is a part of the.
And you wanna make sure that you're investing in the right things. So definitely keep that in mind. But there are people out there you know, hip hop, hotel broker, I know he has looked at a lot of opportunities too, and he te he shares opportunities. So those are a couple of people that I like in the space that you definitely have.
So as, as our last
[00:40:35] Naseema: word, like what do you say to people who think like this? Above their means. This is something that is way too high of a goal to reach that this opportunity is not for them.
[00:40:49] Acquania: No, I say stop thinking that because once I put in my mind that I wanted to do it, I focus on it and I ask God to bring into my life the people who would help me accomplish the goal.
And he answered very quickly because I would say I learned about multifamily syndications in May of 2020, and by June I met Davon and Jessica, and by October I owned a hotel. So it doesn't always look the way you think it's gonna look because again, my. Focused on apartments and God showed me hotels, but he left the window open that once I had a hotel, I still stayed around.
The people who introduced me to apartments, I still looked at the deals that they were putting on their email list, and a year later, when the time was right, I invested. So keep your mind open. Do not be so focused on the outcome that you missed the blessing. Because it might be different from what you thought it would be.
And definitely just keep expanding your network because like I said, if I never interviewed them on my podcast and decided to build a genuine relationship, I would've never known the value of. Now four hotels that I have interest in and one apartment syndication with 354 units. So I'm so blessed.
That is a
[00:42:04] Naseema: portfolio for Days Girl, and I love it. I love it.
But it's all made possible by the fact that you have said all these things in motion. .
[00:42:15] Acquania: Yes.
[00:42:18] Naseema: I love you, Naima. I do. I love you. This is, it's, it's always a good time. And
[00:42:24] Acquania: let, let it, let's be clear. Naba and I, we met through a mutual friend, interviewed you for a magazine, and we become friends, so I I definitely agree with you. When you're genuine and real, then it will manifest in exactly. I'm blessed to have some, given my.
[00:42:42] Naseema: Yes. All right, Charles, this has been an amazing episode. Thank you so much, Quaia, for sharing all your gems. I really appreciate you and look forward to having you back on as our life insurance expert.
[00:42:56] Acquania: I look forward to it. Thank you so much.
Hey there I’m Naseema
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