What Are Real Estate Loans 115

What Are Real Estate Loans

Real estate loans are the types of loan used to buy land or buildings.

In other words, it’s – as any other loan – a temporary provision of financial resources, but which is secured by a mortgage.

There are many things to consider before buying your first rental property. The first one being, whether or not you can afford to take a real estate loan in your current financial situation.

How Do Commercial Real Estate Loans Work?

Commercial real estate (or commercial property) is a term used to describe buildings or land that are or will be generating revenue. That can be by renting it, or selling it.
It’s for business purposes only, and can include retailers, hotels, restaurants, offices, and more.

This is a type of real estate, with the other 2 main ones being residential and industrial real estate.

Taking a loan for a commercial real estate deal means you’ll need to evaluate your options, study the terms (real estate loans might vary from 5 to 20 years, but there’s also the 30-year fixed rate mortgage) and know how you’ll turn this investment into profits and in what time.

The commercial property we’re talking about should be generating income in the long-run. It means you also need to have a business plan, show how you’re planning to do that, and why it’s more than just a business idea in your head.

Let me give you a simple example of a situation where such real estate loans make sense:

You already have an established small business. Depending on whether it’s fully digital or you’re operating from a physical office, it might mean you’re already using commercial real estate.

If you decide it’s time to scale, though, or partner up with someone and start working on something new, you will be eligible for a commercial real estate loan to help you out financially.

You’ll use it to purchase the commercial property and start reaching the business objectives you had in mind for it.

Commercial real estate loans are used for commercial property (not residential), and are taken by businesses (not individuals).

Some things to keep in mind when taking a real estate loan

Most lenders might require a down payment, so be prepared for that.

But that’s not the only way the other party is protected. A lien is used to make sure you do pay back, even if you don’t have it.

That’s basically a legal right given to you by the owner of the property. It’s there to state that the repayment is your obligation. If you can’t meet this after the agreed amount of time, the property will be seized and sold so that the lender receives his money back.

The interest rates might vary. They depend on the kind of business you have and its performance, and your credit reputation.

Whether or not you’re worthy of real estate loans, or any other major loans for what matter, depends a lot on your experience in borrowing money and your credit score.

The latter is something your lender will most probably look into to see the chances of you repaying the money in a time suitable for both parties involved. That data is also used to determine the interest rate in your commercial real estate loan.

If you’re thinking of buying rental property, you should begin doing your research on real estate loans today, understand how exactly they work, and be prepared with all the information when the time for taking a mortgage loan comes.

Get The Lifestyle Designer's Digest
Directly into your inbox every Monday.
Previous ArticleNext Article

One Guy’s Journey from a Work-at-Home Transcriptionist to Starting an Educational Institute 7

One Guy's Journey from a Work-at-Home Transcriptionist to Starting an Educational Institute

This is an interview-style post with Mahesh Kumar.

Hey Mahesh. What do you do?

I’m the Spokesperson of the Transcription Certification Institute, an Ellensburg-WA based educational institution that provides an in-depth online transcription training and certification course.

The online course, which is created by industry leaders, enables transcriptionists to gain a well-rounded understanding of the field and become a professional transcriptionist for better job prospects and higher wages.

How did you start your career?

I’ve started my career as a home-based transcriptionist and have experience of 8+ years in transcription industry. I’m currently on a mission to help work from home moms and make them aware of one of the straightforward and lucrative way of earning money from home, i.e., transcription.

I love writing and so I regularly share my words through my blog. At present, I am working as the spokesperson of Transcription Certification Institute.

What inspired your journey?

I was not cut out for regular jobs because of health and family issues. But, I wanted to earn decent money.

Most work from jobs required me to be online during fixed hours. That did not work for me.

A friend referred me to a copywriter who needed transcription services in an extended time frame. This was my first assignment and exposure to the industry. I had issues with grammar and lots of difficulty in understanding accents. My transcriptionist friend gave me the very first lesson in punctuation. It was a great lesson.

That was the aha moment!

I wanted to share it online with all other new transcriptionists. My expertise in transcription was still limited but my interaction with other transcriptionists. And other work from home professionals found that there was no organized information in this industry.

That’s when with the help of the team we created an ebook as would serve as a handbook to transcriptionists. It was called Everything You Need To Know About Work From Home: General Transcription Business Opportunities.’ It’s available on our website for free.

What is the transcription business about?

It’s a dream that allows parents, caregivers and those with disabilities to stay at home and earn.

We call ourselves Team TCI. None of us has complete skills but together we have made a dream into a business that is sustainable, profitable and manages to help others earn more.

We like to think of ourselves as not just one single successful business owner but a team of accomplished transcriptionists and hedonists who have come together to share their expertise on a platform that is globally accessible to all.

Our objective is to make you a better transcriber so that you can earn more at the same time. 

Through our internship program, we ensure that new wannabe transcribers get a foothold in the industry. Our job board aims to bring transcribers and employers together on one platform to make hiring and finding jobs easier.

We are 9+ years old but the journey has only just begun.

What were your biggest challenges when setting up the institute?

How to Write a Successful Business Plan

Together, we had 2,459 dollars to spare!  This was just enough to put up a website and host it for a year.

We had no budget, no marketing plan and no strategy.

More than money we invested our skills, time and above all intent. When we launched, making money was not the objective. The objective was to share information, educate and in the process recover the costs.

We were totally bootstrapped. In fact, we all transcribed extra hours to generate money.

Each year we invested the money earned in the course, it’s upgrade, website upgrade and more. All exams are manually graded and that is expensive.

What do you offer on the website and who can benefit from it?

We offer a course in general transcription.

Our course is for anyone who wants to work from the comfort of their home, enjoy flexible timings and the ability to choose workload. The course is very popular with parents of young children who want to be around when they grow up, ex-serviceman with disabilities, single moms and others who want to work from home.

Some would say that there is nothing to be learned in general transcription but that would not be true. I did start out without training and if it not had been for the help I received my career would not have been successful.

In fact, as the popularity of transcription as a career option grows getting a foothold in the industry is becoming tough. That is why we came up with an internship program that gives hand on experience to new transcriptionists and exposure to the industry.

The job board benefits them by bringing employers and transcriptionists on the same platform.

What’s one thing you do to unwind?

We were introduced to meditation a few years back and to unwind we like to meditate.

What’s your favorite book?

It keeps on changing but time and again for inspiration, I find myself reaching out to The Alchemist by Paul Coelho. Never stop dreaming! Give context to your dreams!

Check out the story of how one guy went from a work at home transcriptionist to setting up a transcription institute and help others start working from home.