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Allow's state you have a hundred thousand dollars in a financial institution, and afterwards you find it an investment, a syndication or something that you're intending to place 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 submission, one of the two, but it's not in both.
It really is. And I try to help people understand, you understand, how to enhance that performance of their, their cash to ensure that they can do more with it. There's this principle. And I'm really going to try to make this simple of using a property to buy an additional asset.
Investor do this regularly, where you would certainly accumulate equity in a property or a residential or commercial property that you have, any kind of, any type of realty. And afterwards you would take an equity placement versus that and use it to get another home. You recognize, that that's not an an international principle at all, deal with? Entirely.
And after that utilizing that property to get more genuine estate is that after that you become very revealed to genuine estate, suggesting that it's all correlated. Every one of those properties become associated. So in a recession, in the whole of the property market, after that when those, you understand, points start to decline, which does happen.
It hasn't occurred in a while, however I do not recognize. I keep in mind 2008 and 9 quite well. Uh, you know, and so you don't desire to have all of your properties correlated. What this does is it gives you an area to place money originally that is totally uncorrelated to the genuine estate market that is going to be there ensured and be ensured to raise in value over time that you can still have an extremely high collateralization aspect or like a hundred percent collateralization of the cash money value inside of these policies.
I'm attempting to make that as straightforward as possible. Does that make sense to you Marco?
If they had a house 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 scores because they typically would get an 80 20 lending to value on that. And they could get a $300,000 home equity line of credit report.
For one point, that credit rating line is dealt with. In other words, it's going to stay at $300,000, no issue just how long it goes, it's going to stay at 300,000, unless you go get a new appraisal and you obtain requalified economically, and you raise your credit line, which is a large pain to do every time you place in money, which is normally as soon as a year, you contribute new capital to one of these specially designed bulletproof wealth policies that I develop for people, your interior line of credit scores or your access to capital goes up every year.
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