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Old 03-24-2008, 04:49 PM  
Varius
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Join Date: Jun 2004
Location: New York, NY
Posts: 6,890
The money is guaranteed by the real estate. Let's take a case example:

Someone comes along who wants to borrow money. He has as collateral a piece of beach front land worth $1,000,000.

After professional appraisers, lawyers, etc... evaluate the property and approve it as being extremely liquid, the man is allowed to borrow up to 40% of the value, in this case $400,000. The other 60% more than covers unexpected dips (if any) in the market.

Let's say this guy runs away. His land will be sold quickly (thus why only high-end liquid properties are accepted as collateral) to cover your capital investment. Thus, the "no-risk" part.

Anyone who was at the CR Bash this year and saw the presentation or spoke to Michael about it, knows it is not a scam.
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