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Let's claim you have a hundred thousand dollars in a bank, and afterwards you discover it a financial investment, a submission or something that you're intending to place a hundred thousand into. Currently it's gone from the bank and it's in the syndication. It's either in the bank or the syndication, one of the 2, but it's not in both.
And I try to help people comprehend, you know, how to raise that efficiency of their, their cash so that they can do more with it. And I'm truly going to attempt to make this simple of using a property to acquire one more asset.
And after that you would certainly take an equity position versus that and utilize it to purchase one more property. You recognize, that that's not an a foreign concept at all, deal with?
And after that making use of that realty to get more actual estate is that then you become very exposed to property, indicating that it's all associated. Every one of those properties come to be associated. So in a downturn, in the entirety of the property market, after that when those, you know, things start to lose worth, which does happen.
It hasn't occurred in a while, yet I do not recognize. I keep in mind 2008 and 9 quite well. Uh, you recognize, and so you don't intend to have all of your properties correlated. So what this does is it gives you a location to place money at first that is entirely uncorrelated to the realty market that is mosting likely to exist assured and be assured to increase in value with time that you can still have a very high collateralization aspect or like a hundred percent collateralization of the cash money value inside of these plans.
I'm trying to make that as easy as feasible. Does that make good sense to you Marco? Yes, precisely. Precisely. That is, that is specifically the essential point is that you're expanding a property that is ensured to grow, but you have the ability to obtain against it, to take into an additional property.
If they had a home worth a million dollars, that they had $500,000 paid off on, they can most likely obtain a $300,000 home equity line of credit report due to the fact that they generally would get an 80 20 finance to value on that. And they could get a $300,000 home equity credit line.
For one point, that credit line is dealt with. In other words, it's going to continue to be at $300,000, no matter exactly how long it goes, it's going to stay at 300,000, unless you go obtain a new evaluation and you obtain requalified monetarily, and you increase your credit rating line, which is a big pain to do every time you put in money, which is normally as soon as a year, you contribute brand-new funding to one of these specially created bulletproof wide range plans that I create for people, your internal line of credit report or your access to resources goes up every year.
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