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Let's state you have a hundred thousand bucks in a bank, and then you find it a financial investment, a syndication or something that you're wanting to place a hundred thousand into. Currently it's gone from the bank and it's in the syndication. It's either in the bank or the submission, one of the two, yet it's not in both.
It actually is. And I try to help individuals comprehend, you recognize, just how to increase that performance of their, their money to ensure that they can do even more with it. There's this concept. And I'm really going to attempt to make this simple of using a possession to acquire another asset.
Investor do this at all times, where you would develop equity in a realty or a property that you have, any, any kind of realty. And after that you would take an equity setting versus that and use it to buy an additional residential or commercial property. You know, that that's not an an international principle in all, remedy? Totally.
And after that using that actual estate to acquire even more realty is that then you end up being very exposed to realty, meaning that it's all associated. Every one of those properties come to be correlated. So in a slump, in the entirety of the genuine estate market, after that when those, you know, points start to lose worth, which does take place.
Uh, you know, and so you don't want to have all of your properties correlated. What this does is it offers you a location to put cash at first that is totally uncorrelated to the real estate market that is going to be there assured and be guaranteed to enhance in value over time that you can still have an extremely high collateralization factor or like a hundred percent collateralization of the cash money worth inside of these plans.
I'm attempting to make that as basic as possible. Does that make good sense to you Marco? Yes, specifically. Exactly. That is, that is precisely the crucial thing is that you're growing a property that is assured to grow, but you have the ability to borrow against it, to take into one more asset.
So if they had a residence worth a million dollars, that they had actually $500,000 settled on, they could probably get a $300,000 home equity credit line because they commonly would get an 80 20 lending to worth on that particular. And they can get a $300,000 home equity credit line.
Okay. There's a whole lot of troubles with doing that however, that this solves with my approach solves. For one point, that credit scores line is fixed. To put it simply, it's mosting likely to stay at $300,000, despite the length of time it goes, it's mosting likely to stay at 300,000, unless you go get a new assessment and you get requalified financially, and you boost your credit limit, which is a huge pain to do whenever you place in cash, which is normally annually, you add brand-new capital to among these particularly created bulletproof wealth policies that I produce for people, your internal credit line or your access to funding increases each year.
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