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Allow's say you have a hundred thousand dollars in a bank, and then you find it a financial investment, a syndication or something that you're wishing to put a hundred thousand right into. Now it's gone from the financial institution and it's in the syndication. It's either in the bank or the syndication, one of the 2, yet it's not in both.
And I try to aid people comprehend, you understand, exactly how to enhance that performance of their, their cash so that they can do more with it. And I'm really going to try to make this simple of making use of a property to purchase another property.
Investor do this regularly, where you would develop up equity in an actual estate or a residential property that you have, any kind of, any kind of realty. And after that you would take an equity setting against that and utilize it to acquire another residential or commercial property. You understand, that that's not an a foreign idea at all, fix? Completely.
And after that utilizing that realty to acquire more realty is that after that you come to be very revealed to property, suggesting that it's all correlated. Every one of those assets come to be correlated. So in a slump, in the totality of the actual estate market, then when those, you recognize, things begin to shed worth, which does happen.
It hasn't taken place in a while, however I don't understand. I remember 2008 and 9 pretty well. Uh, you understand, and so you don't intend to have every one of your possessions correlated. So what this does is it offers you a place to place money at first that is totally uncorrelated to the realty market that is going to be there ensured and be assured to increase in value in time that you can still have an extremely high collateralization factor or like a hundred percent collateralization of the money value inside of these policies.
I'm attempting to make that as straightforward as feasible. Does that make sense to you Marco? Yes, precisely. Exactly. That is, that is specifically the key point is that you're growing a possession that is guaranteed to expand, but you have the ability to borrow versus it, to take into one more asset.
So if they had a home worth a million bucks, that they had actually $500,000 repaid on, they might most likely obtain a $300,000 home equity line of credit since they normally would obtain an 80 20 loan to value on that. And they might get a $300,000 home equity credit line.
Okay. There's a great deal of issues with doing that however, that this addresses with my method resolves. So for one thing, that line of credit is fixed. To put it simply, it's going to stay at $300,000, no issue the length of time it goes, it's going to stay at 300,000, unless you go get a new evaluation and you obtain requalified financially, and you increase your credit limit, which is a huge pain to do whenever you place in cash, which is typically when a year, you add new funding to one of these specially designed bulletproof wide range plans that I create for people, your internal line of credit scores or your accessibility to capital goes up annually.
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