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Allow's say you have a hundred thousand dollars in a bank, and after that you discover it a financial investment, a submission or something that you're wishing to put a hundred thousand into. Currently it's gone from the financial institution and it remains in the syndication. It's either in the financial institution or the submission, one of the 2, but it's not in both.
It really is. And I try to aid people understand, you recognize, how to raise that performance of their, their cash to ensure that they can do more with it. There's this principle. And I'm truly mosting likely to try to make this simple of utilizing a property to acquire one more asset.
Actual estate financiers do this constantly, where you would develop equity in a property or a property that you have, any type of, any real estate. And afterwards you would take an equity setting versus that and use it to buy one more residential or commercial property. You know, that that's not an a foreign idea at all, deal with? Absolutely.
And then using that realty to get even more property is that after that you end up being highly exposed to realty, indicating that it's all correlated. Every one of those properties become correlated. In a recession, in the whole of the real estate market, after that when those, you recognize, things start to lose value, which does occur.
It hasn't taken place in a while, yet I do not recognize. I bear in mind 2008 and 9 quite well. Uh, you recognize, and so you don't intend to have every one of your possessions associated. So what this does is it offers you an area to place cash at first that is totally uncorrelated to the realty market that is going to be there assured and be ensured to raise in value with time that you can still have a very high collateralization aspect or like a hundred percent collateralization of the money worth within these policies.
I'm attempting to make that as straightforward as feasible. Does that make sense to you Marco? Yes, exactly. Specifically. That is, that is exactly the vital thing is that you're expanding a property that is guaranteed to expand, however you have the ability to borrow versus it, to take into one more possession.
If they had a residence worth a million bucks, that they had actually $500,000 paid off on, they might probably obtain a $300,000 home equity line of credit report because they normally would obtain an 80 20 car loan to worth on that. And they might get a $300,000 home equity line of debt.
Okay. There's a lot of troubles with doing that though, that this resolves with my method solves. So for one point, that credit line is dealt with. In various other words, it's going to continue to be at $300,000, no issue how much time it goes, it's mosting likely to remain at 300,000, unless you go obtain a brand-new evaluation and you get requalified economically, and you raise your line of credit, which is a huge pain to do every time you place in money, which is normally yearly, you add new resources to one of these specially designed bulletproof wide range policies that I create for people, your interior credit line or your access to funding increases yearly.
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