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Let's say you have a hundred thousand dollars in a bank, and after that you discover it a financial investment, a syndication or something that you're desiring to put a hundred thousand into. Now it's gone from the bank and it's in the submission. It's either in the financial institution or the syndication, one of the 2, however it's not in both.
And I try to assist individuals comprehend, you understand, exactly how to enhance that effectiveness of their, their money so that they can do even more with it. And I'm actually going to try to make this simple of utilizing a possession to purchase one more asset.
Genuine estate capitalists do this all the time, where you would develop equity in a realty or a home that you own, any, any type of realty. And after that you would certainly take an equity setting against that and use it to buy another residential or commercial property. You understand, that that's not an a foreign concept in all, correct? Completely.
And after that making use of that property to acquire more realty is that after that you become highly subjected to realty, indicating that it's all correlated. All of those possessions end up being correlated. So in a slump, in the entirety of the property market, then when those, you understand, points start to lose worth, which does occur.
It hasn't occurred in a while, yet I do not know. I keep in mind 2008 and nine rather well. Uh, you know, and so you don't want to have all of your properties associated. What this does is it provides you a location to place money at first that is completely uncorrelated to the actual estate market that is going to be there ensured and be guaranteed to increase in worth over time that you can still have an extremely high collateralization variable or like a hundred percent collateralization of the money worth inside of these plans.
I'm trying to make that as easy as feasible. Does that make good sense to you Marco? Yes, precisely. Precisely. That is, that is specifically the crucial thing is that you're growing a possession that is guaranteed to expand, yet you have the ability to obtain against it, to take into another asset.
So if they had a home worth a million dollars, that they had actually $500,000 repaid on, they can probably get a $300,000 home equity credit line because they commonly would obtain an 80 20 finance to worth on that. And they might get a $300,000 home equity line of credit scores.
Okay. There's a great deal of problems with doing that however, that this resolves with my approach fixes. So for something, that credit scores line is repaired. To put it simply, it's going to continue to be at $300,000, despite for how long it goes, it's going to remain at 300,000, unless you go get a brand-new evaluation and you get requalified economically, and you enhance your credit limit, which is a big discomfort to do every single time you put in cash, which is normally when a year, you contribute brand-new capital to among these specifically created bulletproof wide range policies that I develop for people, your interior line of debt or your access to capital rises yearly.
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