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Allow's claim you have a hundred thousand bucks in a bank, and afterwards you locate it an investment, a syndication or something that you're intending to put a hundred thousand into. Currently it's gone from the bank and it remains in the submission. It's either in the bank or the syndication, one of the 2, however it's not in both.
It truly is. And I attempt to aid individuals understand, you recognize, just how to raise that performance of their, their money to make sure that they can do even more with it. There's this concept. And I'm actually mosting likely to try to make this simple of using an asset to buy an additional asset.
And after that you would certainly take an equity position versus that and use it to purchase another building. You understand, that that's not an a foreign idea at all, deal with?
And afterwards utilizing that property to get more real estate is that after that you end up being very exposed to real estate, meaning that it's all associated. Every one of those assets come to be associated. So in a recession, in the entirety of the realty market, after that when those, you understand, things begin to shed value, which does happen.
Uh, you understand, and so you do not desire to have all of your assets associated. What this does is it gives you a location to place cash initially that is totally uncorrelated to the actual estate market that is going to be there guaranteed and be guaranteed to enhance in value over time that you can still have a very high collateralization factor or like a hundred percent collateralization of the money value inside of these policies.
I'm trying to make that as simple as possible. Does that make sense to you Marco? Yes, exactly. Precisely. That is, that is exactly the key point is that you're expanding an asset that is assured to grow, however you have the ability to borrow versus it, to put right into an additional property.
So if they had a house worth a million dollars, that they had actually $500,000 paid off on, they can possibly obtain a $300,000 home equity credit line due to the fact that they generally would obtain an 80 20 funding to value on that. And they might get a $300,000 home equity credit line.
Okay. There's a great deal of issues with doing that however, that this solves with my strategy resolves. For one thing, that credit scores line is dealt with. To put it simply, it's mosting likely to continue to be at $300,000, regardless of the length of time it goes, it's mosting likely to remain at 300,000, unless you go get a brand-new evaluation and you obtain requalified monetarily, and you raise your credit limit, which is a big discomfort to do whenever you place in cash, which is normally when a year, you add brand-new funding to one of these specially created bulletproof wide range plans that I produce for people, your interior line of credit or your access to resources rises yearly.
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