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Another variation, if the seller is in a financial position to make the premiums, is to offer him perhaps 4 mil in policies. That is fine for the buyer, who can get those policies for around 800K or so.
The formula works particularly well with land. Large parcels of land typically take a long time to sell, usually have a down payment and carryback note, and often are asked by the buyer to subordinate to construction financing for a project. The formula will not wpr with cash flow apartments and commercial. Owners are not going to give up cash flow real estate for LSPs.
May be a bit iffy in Texas right now. Two stories from this week:
The Texas Supreme Court bolstered lawsuits by the state and a group of investors against Life Partners by ruling life settlements are securities subject to the Texas Securities Act and not mere life insurance contracts.
http://www.courthousenews.com/2015/05/12/embattled-insurer-dealt-blow-by-texas-high-court.htm
Regulators (SEC) file complaint against North Texas financial firm
http://www.chron.com/news/texas/article/Regulators-file-complaint-against-North-Texas-6256088.php
Great explanation. Thanks!
M4L category Housing Scheme
BFL...
bkmk
5.56mm