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Let's say you have a hundred thousand bucks in a bank, and afterwards you find it an investment, a syndication or something that you're wishing to put a hundred thousand into. Currently it's gone from the financial institution and it's in the syndication. It's either in the financial institution or the syndication, one of the 2, yet it's not in both.
It truly is. And I try to assist individuals recognize, you understand, exactly how to enhance that effectiveness of their, their money to make sure that they can do even more with it. There's this principle. And I'm actually mosting likely to attempt to make this simple of making use of an asset to acquire one more property.
Investor do this all the time, where you would certainly develop equity in an actual estate or a building that you possess, any type of, any type of real estate. And afterwards you would take an equity position versus that and use it to purchase another property. You understand, that that's not an an international idea in any way, fix? Completely.
And after that utilizing that realty to purchase more real estate is that after that you become highly subjected to realty, implying that it's all associated. Every one of those assets end up being correlated. So in a recession, in the totality of the property market, then when those, you recognize, things begin to lose worth, which does happen.
Uh, you understand, and so you don't desire to have all of your properties correlated. What this does is it offers you a place to place cash originally that is completely uncorrelated to the actual estate market that is going to be there guaranteed and be guaranteed to raise in value over time that you can still have a very high collateralization element or like a hundred percent collateralization of the money worth inside of these plans.
I'm trying to make that as easy as feasible. Does that make sense to you Marco?
So if they had a home worth a million bucks, that they had actually $500,000 settled on, they could most likely get a $300,000 home equity line of credit rating because they generally would obtain an 80 20 loan to worth on that. And they could obtain a $300,000 home equity credit line.
Okay. There's a great deal of issues with doing that however, that this solves with my method resolves. So for one thing, that credit line is fixed. To put it simply, it's going to remain at $300,000, regardless of how much time it goes, it's mosting likely to stay at 300,000, unless you go get a new appraisal and you obtain requalified monetarily, and you enhance your credit line, which is a large pain to do whenever you place in cash, which is commonly yearly, you contribute brand-new capital to one of these specially created bulletproof riches policies that I produce for people, your internal credit line or your accessibility to funding goes up every year.
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