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Let's state you have a hundred thousand bucks in a financial institution, and then you find it an investment, a submission or something that you're wanting to put a hundred thousand into. Now it's gone from the bank and it's in the submission. So it's either in the bank or the syndication, among the 2, but it's not in both - infinite concept.
It truly is. And I attempt to aid people understand, you understand, just how to raise that effectiveness of their, their money to make sure that they can do more with it. There's this concept. And I'm really going to attempt to make this simple of using a property to purchase an additional asset.
Investor do this at all times, where you would build up equity in a realty or a residential or commercial property that you possess, any kind of, any type of realty. And afterwards you would take an equity position against that and use it to purchase another residential property. You understand, that that's not an a foreign concept whatsoever, fix? Absolutely.
And then making use of that actual estate to get even more property is that after that you become extremely revealed to realty, indicating that it's all associated. Every one of those properties become correlated. In a decline, in the entirety of the genuine estate market, after that when those, you know, points start to shed worth, which does occur.
Uh, you recognize, and so you don't want to have all of your possessions associated. What this does is it provides you a place to put cash initially that is totally uncorrelated to the real estate market that is going to be there assured and be ensured to raise in worth over time that you can still have an extremely high collateralization factor or like a hundred percent collateralization of the money worth inside of these policies.
I'm trying to make that as basic as feasible. Does that make sense to you Marco? Yes, specifically. Exactly. That is, that is precisely the vital point is that you're growing a property that is ensured to grow, but you have the ability to obtain against it, to take into one more asset.
If they had a home worth a million dollars, that they had $500,000 paid off on, they could most likely get a $300,000 home equity line of credit rating due to the fact that they normally would obtain an 80 20 funding to worth on that. And they can get a $300,000 home equity line of credit history.
For one point, that credit report 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 stay at 300,000, unless you go get a brand-new assessment and you obtain requalified economically, and you enhance your credit history line, which is a huge pain to do every time you place in cash, which is commonly when a year, you add new resources to one of these particularly created bulletproof wealth policies that I develop for individuals, your inner line of credit or your access to funding goes up every year.
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