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Let's state you have a hundred thousand dollars in a financial institution, and then you locate it a financial investment, a syndication or something that you're wishing to put a hundred thousand into. Now it's gone from the financial institution and it's in the submission. So it's either in the financial institution or the submission, among the two, however it's not in both - Can I be my own bank? I own a small business. ....
And I try to help individuals recognize, you understand, how to increase that performance of their, their money so that they can do more with it. And I'm truly going to attempt to make this simple of using a property to purchase one more possession.
Actual estate financiers do this regularly, where you would build up equity in a property or a building that you own, any kind of, any kind of realty. And after that you would certainly take an equity placement against that and utilize it to acquire one more property. You understand, that that's not an a foreign principle at all, remedy? Absolutely.
And after that utilizing that property to acquire more real estate is that then you come to be very exposed to property, implying that it's all associated. Every one of those assets become associated. So in a downturn, in the entirety of the realty market, then when those, you recognize, things begin to decline, which does occur.
Uh, you recognize, and so you do not desire to have all of your possessions correlated. What this does is it gives you an area to put cash originally that is completely uncorrelated to the actual 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 aspect or like a hundred percent collateralization of the cash money value inside of these plans.
I'm attempting to make that as basic as possible. Does that make good sense to you Marco? Yes, exactly. Precisely. That is, that is precisely the essential point is that you're growing a possession that is guaranteed to expand, yet you are able to borrow against it, to take into an additional possession.
So if they had a house worth a million bucks, that they had $500,000 settled on, they could possibly get a $300,000 home equity line of credit since they usually would obtain an 80 20 funding to value on that. And they might obtain a $300,000 home equity line of debt.
For one thing, that credit score line is taken care of. In various 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 new evaluation and you get requalified financially, and you enhance your credit score line, which is a big discomfort to do every time you put in cash, which is normally when a year, you contribute new funding to one of these specifically developed bulletproof riches plans that I create for people, your internal line of credit or your access to capital goes up every year.
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