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Allow's state you have a hundred thousand dollars in a bank, and after that you discover it a financial investment, a submission or something that you're wishing to put a hundred thousand right into. Now it's gone from the bank and it's in the submission. It's either in the financial institution or the syndication, one of the two, but it's not in both.
It truly is. And I try to help people recognize, you recognize, exactly how to increase that effectiveness of their, their cash to ensure that they can do more with it. There's this principle. And I'm really mosting likely to attempt to make this simple of using a property to acquire one more asset.
Investor do this constantly, where you would accumulate equity in a real estate or a residential or commercial property that you own, any, any kind of property. And after that you would certainly take an equity placement versus that and utilize it to acquire another property. You recognize, that that's not an a foreign principle at all, remedy? Entirely.
And then using that property to purchase more realty is that then you end up being extremely revealed to realty, suggesting that it's all correlated. Every one of those properties come to be correlated. So in a downturn, in the entirety of the genuine estate market, then when those, you understand, points begin to decline, which does occur.
Uh, you understand, and so you do not want to have all of your assets correlated. What this does is it provides you a location to place cash initially that is entirely uncorrelated to the real estate market that is going to be there ensured and be assured to boost in worth over time that you can still have an extremely high collateralization element or like a hundred percent collateralization of the cash value inside of these policies.
I'm trying to make that as easy as possible. Does that make sense to you Marco?
So if they had a home worth a million dollars, that they had $500,000 repaid on, they can probably obtain a $300,000 home equity line of credit scores because they commonly would get an 80 20 lending to value on that. And they might obtain a $300,000 home equity line of credit.
Okay. There's a great deal of troubles with doing that though, that this resolves with my approach fixes. So for something, that credit line is fixed. In other words, it's going to continue to be at $300,000, no matter for how long it goes, it's going to remain at 300,000, unless you go get a brand-new appraisal and you get requalified monetarily, and you boost your line of credit, which is a huge pain to do each time you place in cash, which is usually annually, you contribute new capital to one of these specially developed bulletproof wide range plans that I create for individuals, your internal credit line or your access to capital rises each year.
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