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Let's say you have a hundred thousand bucks in a bank, and after that you find it a financial investment, a submission or something that you're intending to put a hundred thousand into. Now it's gone from the bank and it's in the submission. It's either in the bank or the syndication, one of the 2, however it's not in both.
It actually is. And I try to help individuals recognize, you know, how to enhance that efficiency of their, their cash to make sure that they can do even more with it. There's this principle. And I'm really going to try to make this simple of utilizing a possession to buy another possession.
Actual estate capitalists do this all the time, where you would build up equity in a realty or a residential property that you possess, any type of, any type of actual estate. And after that you would take an equity placement versus that and use it to get an additional residential property. You understand, that that's not an a foreign concept in any way, deal with? Completely.
And after that using that genuine estate to purchase even more property is that after that you come to be very revealed to property, meaning that it's all associated. Every one of those assets end up being associated. So in a recession, in the totality of the property market, after that when those, you know, things start to lose value, which does take place.
It hasn't taken place in a while, however I don't know. I bear in mind 2008 and 9 pretty well. Uh, you recognize, and so you do not wish to have every one of your properties associated. What this does is it offers you a place to place money originally that is completely uncorrelated to the real estate market that is going to be there guaranteed and be assured to raise in value over time that you can still have a really high collateralization factor or like a hundred percent collateralization of the cash worth inside of these policies.
I'm attempting to make that as easy as possible. Does that make feeling to you Marco? Yes, exactly. Specifically. That is, that is exactly the key point is that you're expanding a property that is ensured to expand, however you are able to borrow against it, to take into an additional asset.
If they had a residence worth a million dollars, that they had actually $500,000 paid off on, they can possibly get a $300,000 home equity line of credit history due to the fact that they normally would obtain an 80 20 finance to worth on that. And they can get a $300,000 home equity line of credit rating.
For one thing, that credit line is taken care of. In other words, it's going to continue to be at $300,000, no matter exactly how long it goes, it's going to remain at 300,000, unless you go get a new assessment and you get requalified monetarily, and you raise your credit history line, which is a big discomfort to do every time you put in cash, which is typically when a year, you add new funding to one of these particularly developed bulletproof wide range policies that I develop for people, your internal line of credit or your accessibility to resources goes up every year.
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