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Allow's say you have a hundred thousand dollars in a bank, and after that you discover it an investment, a syndication or something that you're wishing to place a hundred thousand into. Now 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, yet it's not in both.
It actually is. And I try to help individuals understand, you understand, exactly how to enhance 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 going to attempt to make this simple of utilizing an asset to acquire another asset.
Investor do this regularly, where you would develop equity in a genuine estate or a property that you possess, any kind of, any type of property. And after that you would take an equity setting versus that and utilize it to get one more building. You understand, that that's not an an international concept whatsoever, correct? Completely.
And after that utilizing that property to purchase more actual estate is that then you end up being highly subjected to actual estate, meaning that it's all associated. All of those properties become associated. In a slump, in the entirety of the genuine estate market, then when those, you recognize, points begin to shed worth, which does happen.
Uh, you understand, and so you don't desire to have all of your assets correlated. What this does is it provides you an area to place cash initially that is entirely uncorrelated to the real estate market that is going to be there ensured and be assured to boost in value 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 policies.
I'm trying to make that as simple as possible. Does that make sense to you Marco?
So if they had a home worth a million bucks, that they had actually $500,000 repaid on, they can most likely obtain a $300,000 home equity credit line because they normally would obtain an 80 20 lending to value on that. And they could obtain a $300,000 home equity credit line.
Okay. There's a whole lot of issues with doing that however, that this addresses with my approach solves. So for one point, that debt line is dealt with. Simply put, it's mosting likely to continue to be at $300,000, regardless of the length of time it goes, it's going to remain at 300,000, unless you go get a brand-new evaluation and you obtain requalified financially, and you boost your credit rating line, which is a huge pain to do every single time you place in cash, which is typically annually, you contribute new resources to one of these specifically designed bulletproof wide range plans that I produce for individuals, your inner line of credit rating or your accessibility to capital goes up annually.
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