The Basics of Commercial Real Estate Loans

Many lending institutions make available commercial real estate loans which are mainly for income producing and business related sites. This loan is not something that does not require much time with little preparation and your effort, which you won’t regret.

There are many projects you can go into using this loan. An example of such projects are shopping centers. This requires an environment that has a better location where people coming to do business in it will want to have their office in your shopping centers.

For any business to boom the location must be seriously put into consideration. You can’t get this loan and invest it in a business that will end up not yielding anything. If your building is not situated in a good atmosphere your building will just be empty because people will not appreciate it.

Having gone to the lenders for loan it will be wise for you to utilize it well. Also bear in mind that loan will be repaid. So maximum planning needs to be done to make the business successful. Choose a business that you know everybody visits daily. That is, the business will be generating daily income. A similar organization includes gas stations, restaurants, cafe, hotels, and retail stores to name a few.

Commercial real estate loans has two fundamental types namely: the short term loans and the long term loans. It does not matter the kind of loan you are looking for, what matters is what you need the loan for and what you will benefit from the business you plan establishing.

More? Use An Expert Service

10 Investment Mistakes to Avoid

We are always in pursuit of perfect investment tips so that our money is safe ,secured and earns us above average returns. While this is desirable by everyone,not all manage to make perfect investments. There are quite a few who have made one or more investment mistakes that they should have avoided. Here let me state 10 such very obvious mistakes that you must guard against at all times:-

1. Buying any insurance plan other than pure Term Plan

I am of the firm opinion that we all must have life insurance for self and family members,but, I strongly recommend you to buy only Term insurance and not any other plan like endowment,money back etc. The reason is very simple.In term plan the companies charge you premium only to cover the mortality charges while in endowment plan they charge you huge charges like admin charge etc over and above mortality charges. In traditional endowment plans as much as 40-50% of the premium paid might just go in servicing the charges for first few years thereby severely impacting the returns that you get. Hence, look at insurance plans as pure insurance and not investment tool. Buy only pure term plan from any insurer.

2. Falling for “New Fund Offer” in Mutual Funds

Another big scam out there is the “New Fund Offer” bait that mutual fund companies use to lure customers. New Fund offer basically sells on the premise that you get units at lesser value of Rs 10 while older funds might have NAV much higher than that. Hence in new fund offer you get more units. But this argument is big fallacy since there is basic difference in the way mutual fund and normal stock/equities work. In equities there is difference in the intrinsic value of the stock and market value, while in mutual funds the intrinsic value and market value are same. Hence more units at lower NAV does not mean better deal for mutual funds. Also in new fund you don’t know the track record of the fund and the performance of fund manager. Hence, its like taking a shot in the dark not knowing the target and hoping for the best. My advice: Stay out of New Fund Offer, always invest in funds with proven track record over 5-10 year time frame.

3. Investing in equity /mutual funds only on the agents recommendation

Lot of people put their hard earned money in funds only on the basis of their agents recommendation without doing even basic research on the fund quality,its performance track record,fund manager and his credentials etc. While doing research may not be easy or tenable for all, it certainly does not mean that one should put money where agent tells us. Agent mostly have their own interest to take care of first before they take care of yours and hence their advice may not be best for you.They may be guided by the motive of making commission and hence might advice you accordingly. My advice :D o some preliminary research yourself before investing;if you cant do it then take a certified financial planners view.

4.Not investing in Health/Mediclaim Plans

Another mistake that people do is to never think about the medical contingencies and the effect it could have on ones mental,physical and financial health. It can wreak havoc on your finances at times. Hence, its almost a necessity to have medical/health plans for the whole family so that you are well prepared to meet any such eventuality should it arise.My advice:Buy a floater plan of at least Rs 5 lakhs for the family from a good general insurance firm.

5.Too much or too little exposure in equities

Equity markets have always evoked extreme reactions which also reflects in the investing habits of people. The mistake with equity investment that most people do is to have either too much or too little exposure. Both are not desirable. Too much exposure means you are exposed to the vagaries of markets beyond manageable limits and too little exposure limits the upside gains opportunity that these markets provide. So how much equity exposure is right for you? The thumb rule is to subtract your age from 100 to arrive at the equity portion of your investible corpus. For example if your age is 30 , then you should have 70%(100-30) of your portfolio invested inequities. My advice:Stick to 100-Age rule for equity investments.

6. Concentrated portfolio

As the old adage goes”Never put all your eggs in one basket” we should always look to have a diversified portfolio. Concentrated portfolio’s are much more risky than a well diversified one and hence can cause severe damage in difficult times. My advice: Have a well diversified portfolio comprising of investments in gold, equity, debt, bonds, mutual funds, FD etc. The proportion of each of these components will depend on your risk appetite and financial goals.

7.Not monitoring your portfolio

Another mistake that people tend to make is to stop monitoring their portfolio’s after they make their investment. It is very important to keep reviewing ones portfolio at regular intervals to find out which portion or fund is under performing and whether there is any need to change asset allocation. Remedial measures must be taken periodically be weeding out bad performers from time to time.My Advice:Never underestimate the power of reviewing portfolio regularly. It can help you grow your money faster.

8.Splurging on credit cards

Lot of people fall prey to this one. Credit card being such a convenient product makes splurging very easy for us . We all need to stay out of it because it can put severe strain on your savings and investments. My advice: Use credit card wisely. Never buy luxury for self on credit.

9. Taking Loans to invest in IPO/stocks

I know that there are quite a few people out there who don’t mind taking loan and investing it in IPO(Initial Public offering ) of companies hoping to make a quick kill on listing day. They hope to return the loan and pocket the profit made. While this may work at times, it is not a very smart thing to do since we don’t know for sure whether we would certainly make a profit on listing. Also as a thumb rule never borrow money to invest in stock market hoping to cash in on bull market or someone told you that this stock will do well or your friend made decent money that way. My Advice:Never borrow to invest. invest only when you have surplus saved out of your earnings.

10. Starting too late

This is the classic one. most of us do regret not having started early on investment. Very few of us do manage to start investing right from their first salary. The power of compounding works wonder when someone starts early.So friends, if there is one mistake you don’t want to commit, it should be this one. My advice: The best time to invest is today. Remember its the early bird which catches the worm.

Stay wise n Stay Wealthy….

Stay Afloat Amid a Recession – Handling a Poor Credit Personal Loan

The current global financial situation seems not able to provide balance. In the past years, you probably were hindered from seeking and securing significant loans because of high interest rates imposed. You may also be suffering from bad credit history. Following the financial crisis and the fall in loan rates, you probably are still hindered from seeking one. The difference can be that currently, it is very hard to seek loans from banks and other creditors. However, you can still surely secure a poor credit personal loan if you will be patient in finding and applying for one.

The current global economic slowdown is truly taking its toll. As financial institutions and banks worldwide suffer from the collapse of subprime loans and investment lenders, the overall atmosphere in personal loans, mortgage and other types of loans are obviously and logically crowded.

There are simple and practical ways to remain not broke or financially stable despite the crisis. Moreover, you will need a poor credit personal loan. As rates start to decline, you should realize that the crisis could be an opportunity to invest, especially in the low and practically priced properties and homes across the market. Here are several simple guidelines on how people can effectively and strategically handle a poor credit personal loan these days.

• Central banks all over the world are seeking to lower interest rates to desired levels. The efforts are aimed at persuading investors and buyers to secure and tap more cash reserves to fund purchases and transactions, which in turn can help bolster the overall economy in the long run. Seize the opportunity to seek poor credit personal loan products while rates continue to be lucrative and attractive.

• Compare and shop for bad credit personal loans available in the market. You should be aware that right now, there are numerous lenders and loan providers that are competing to get the most bulk of the market. Get quotes from different banks and financial institutions and instantly compare figures, then determine which lender offers the best and most convincing rates.

• There are just too many attractive personal loan products even for bad credit borrowers. However, before jumping into the bandwagons, think again. Are you sure the loan you are eying is not a rattrap that will make you lose more money in the long run? Choose the best and most reputable lenders and stick to them as much as possible. Check out the features and other provisions of modern bad credit loan products. Some of them are not too ideal to keep in the long term.

• As always, make sure your credit history is always in good shape and is able to entitle you to bigger loans in the future. Credit cards can help slash and bolster the overall market. Purchase through such cards and repay the amount before the cutoff statement date. If you keep your credit card account healthy and unflawed, you will surely earn a good credit standing, which can help make you easily qualify for any poor credit personal loan in the future.