When the VM hub is in Modem Mode I have notice the REd Light is always on. I think thats because WiFi is disabled within the hub.
You will require an ethernet cable between the hub port 4 and the external modem. The external modem should be set to DHCP on the wan. The VM hub will only issue one IP address in Modem mode. The Modem is 192,168.100.1 and the external router will recieve an IP address of 192.168.100.x where x = between 2 and 254. I have noticed occasionally you may have to reset the VM hub (power off / power on) for it to issue a DHCP address to the router.
When the VM hub is in Modem mode ther Firewall is DISABLED so your router MUST have good protection methods. A minimum of a firewall wnabled is required.
I run in Modem Mode with a 3rd Party Router as a wifi access point.... This works for my requirements