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Let's claim you have a hundred thousand dollars in a financial institution, and then you discover it a financial investment, a syndication or something that you're wanting to put a hundred thousand into. Currently it's gone from the bank and it remains in the syndication. It's either in the financial institution or the submission, one of the two, but it's not in both.
It truly is. And I attempt to help individuals understand, you know, exactly how to raise that performance of their, their cash so that they can do even more with it. There's this idea. And I'm truly mosting likely to try to make this simple of using a property to acquire another property.
And then you would take an equity position versus that and utilize it to purchase an additional property. You know, that that's not an an international principle at all, deal with?
And then making use of that real estate to acquire even more actual estate is that then you end up being highly exposed to realty, suggesting that it's all correlated. All of those properties end up being correlated. In a slump, in the entirety of the real estate market, after that when those, you recognize, points begin to lose worth, which does occur.
Uh, you know, and so you don't want to have all of your possessions correlated. What this does is it provides you a location to put cash originally that is completely uncorrelated to the genuine estate market that is going to be there ensured and be assured to raise in worth over time that you can still have a very high collateralization factor or like a hundred percent collateralization of the cash money value inside of these plans.
I'm attempting to make that as simple as possible. Does that make good sense to you Marco? Yes, specifically. Exactly. That is, that is exactly the crucial thing is that you're growing an asset that is guaranteed to expand, but you have the ability to borrow versus it, to place into one more property.
If they had a residence worth a million dollars, that they had actually $500,000 paid off on, they could possibly obtain a $300,000 home equity line of credit score because they generally would obtain an 80 20 loan to value on that. And they can obtain a $300,000 home equity credit line.
For one thing, that credit line is fixed. In various other words, it's going to remain at $300,000, no matter how long it goes, it's going to remain at 300,000, unless you go get a brand-new assessment and you get requalified monetarily, and you enhance your debt line, which is a large discomfort to do every time you put in money, which is commonly as soon as a year, you add new funding to one of these particularly created bulletproof riches plans that I create for individuals, your inner line of credit report or your accessibility to resources goes up every year.
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