Adam Hooper – Let’s put some dollars that are real that.

Adam Hooper – Let’s put some dollars that are real that.

Adam Fountain – Go ahead.

Adam Hooper – when you take on leverage, if you raise a $200 million fund, you might lever that to $400 million of capacity if you raise a $200 million fund, you have $200 million of capacity, where you’re saying.

Adam Fountain – Right. And in which the nagging issue can happen is, let’s assume you create a million buck loan. You’ve raised $500,000 from investors, then you borrowed $500,000 from a bank in order to make that loan to that particular builder or designer. Now, if that loans goes laterally you have to take that property back, the bank is going to want its money on you, and. And from now on you have got, if it is a construction loan, you have got a half completed task, and you have to provide $500,000 back once again to the financial institution you borrowed from. To ensure can eat into any type of equity pillow pretty quickly. While in an investment like ours, we’re financing at a 65% loan to value ratio, and in case we just just take a residential property right straight back, the theory is that, we’re no greater than 65% associated with initial assessment value. Therefore we preserve that equity pillow. We don’t owe anybody such a thing regarding the loans that people make. If there was clearly a severe proper, in concept, we’re able to simply simply just take a property back and lay on it for quite some time. That’s the flexibleness I think as this cycle gets longer and longer, people forget what happens when the tide goes out that you get when not having leverage, and. Adam Hooper – Let’s put some dollars that are real that. 더보기