WHAT ARE THE 5C'S OF CREDIT FOR LOAN,MORTGAGE AND FUND IN REAL ESTATE?

 

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5C's of the credit is a term use in business to get funding from banks and other financial institutions for business purposes. Now these 5C, S also use in the real estate business, especially when someone buys homes, houses, land, shops and flats etc. in commercial or residential properties. The concept of 5C'S is very keen in USA, UK, Canada, Australia, Singapore, Hongkong and Dubai etc. where lenders take serious before offering funds to individuals and companies.

THE 5C'S OF CREDIT STANDS FOR

CHARACTER

CAPACITY

CAPITAL

COLLATORAL

CONDITIONS    

5C'S is the framework used by many traditional lenders to evaluate potential borrowers. In many countries, institutions take these steps very seriously. However, There are not strict guidelines in many countries. Even in online lenders use simple proprietary to determine a borrower's application for credit by analyzing finances and other data, such as different social media accounts.

1)  CHARACTER; Refers to borrowers reputation for repaying debits

Character  of any individual is very important to descibe himself or herself in front of people or insitituon in every aspect of life.In business "Character" refers to borrowers reputation for repauying debits.Lenders think barrower's gerneral trustworthiness,credibility and personality in the form of first "W" what is it?

Why? It matters becasue financial institutions want to lend to people who are responsible in deal and keep things to fulfill commitments.
 
H;How it's assessed?
Lenders assessed borrowers charater from references,repuation and nteraction with lenders.
 

2)  CAPACITY; Measures borrower's ability to repay a loan

Capacity or cash flow measure borrower's ability to repay loans and lenders review borrower's hoistory before decision.

Lenders use What,Why and How to complete this step.

"W",What it is?  includes the ability to repay loans

"W",Why it matters? A business must generate enough cash flow to repay the loan. Loans are a form of debt.

"H",How it’s assessed: History it includes financial metrics and benchmarks (debt and liquidity ratios, cash flow statements), credit score, borrowing and repayment history.

"H",How to master it? It metters in online and local banking differently.Online some lenders are very open to help finance immediate cash flow gaps.In local banks, pay down previous debt before you apply. Also, calculate your cash flow to understand your starting point before heading to the bank.

3 Capital; Consideration of money put towards investment

The level of capital usually considered by lenders toward investment.It includes amount of money and cridet in business.

"W",What it is? The amount of money invested by the business owner or management team.

"W",Why it matters?Becasue  Banks are more willing to lend to those who have invested some of their own money into the venture rather than loans. In most cases lenders are not willing to take on 100% of the financial risk.

"H",How it’s assessed?  The amount of money the borrower or management team has invested in the business help to assessed.

"H",How to master it? In many cases 70% of small-business owners use personal savings to start their business.

  

4. COLLATORAL;Secures the loan with the assurance of assets

The assurance of assets need to secure the loans.It includes the recurity,back up sources requires.

"W",What it is? Assets that can be pledged as security.

"W",Why it matters? Becasue collateral acts a backup source if the borrower cannot repay a loan.

"H",How it’s assessed? Hard assets such as real estate and equipment; working capital, such as accounts receivable and inventory; and a borrower’s home that also can be counted as collateral.

"H",How to master it? By picking the right business structure can help protect your personal assets from being used as collateral if you’re sued or if a lender is trying to collect. Making your company a legal entity will help you mitigate the risk.

  

5. CONDITIONS;Reffers how the buyer intends to use the money

Lenders in almost many cases put conditions to borrowers intends to use the money.

"W",What it is? The business will use the loan and how that could be affected by economic or industry factors.

"W",Why it matters?BEcasue  To ensure that loans are repaid, banks want to lend to businesses operating under favorable conditions. They want to identify risks and protect themselves accordingly.

"H",How it’s assessed: A review of the competitive landscape, supplier and customer relationships, and macroeconomic and industry-specific issues to ensure that risks are identified and mitigated.

"H",How to master it? You can not control the economy, but you can plan. Although it might seem counterintuitive, apply for a line of credit when your business is strong.

 

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What Are 10 Skills Realtor Need To Improve In Real Estate Profession For Life Time

What Are The10 Skills Realtor Need To Improve In Real Estate Profession For Life Time?

10 Realtos Skills

 

10 Skills Realtor Need To Improve In Real Estate Profession For Life Time

In modern real estate where realty business is a profit generating business for many people and organizations. Realtors require professional qualifications and expertises to work in the industry. Today we are here to discuss the 10 realtor skills on workplace to become a successful professional in the real estate business. 

Research

Research is the part and parcel of the every business. In professional life every individual need to research on business or profession. In realty business professionals need to research on real estate business, commercial and residential properties to understand the nature of project in term of areas, markets and prices of different listings. Research on the market is important because it helps a professional to explain the complete picture of realty listings for customers and investors.  

Organizational Planning

Organization planning includes the daily routine work within the office. If as a professional you are responsible to manage the office of the realty you need to manage things. It includes different departments i.e. Accounts, HR, Marketing, IT,Social Media and publication related to properties.

Confidence and Persistence 

Confidence and persistence is very important to face customers and investors on the workplace. It is a personal expertise which achieve with knowledge and practice. More and more information and study helps to gain confidence in real estate work. Whereas, Interaction with customers and knowledge of listings or knowledge of the field helps a professional to gain confidence. Real estate is not an easy job. However, It's a profitable business but it takes time to get success.It is very important for realtors or brokers to be a persistent on workplace to get a success.

Computer Knowledge

Computer knowledge includes the usage of Microsoft Words, Spreadsheets, Power Point etc. It also includes the use of social media, i.e. Google, YouTube, Facebook, Instagram, Twitter and Pinterest in modern real estate. Because social media helps realtor to get listing an clients. All form of social media are important to learn in modern world. Moroever, Real estate firms use websites and listing websites to find clients and investors. In this case if a realtor have understanding with computer then its a helpful to get success in real estate business.  

People Skills

It includes the handling of subordinates and work related people inside and outside organization. Moreover, People skills include conversation on phone, emails and face to face. 

Self Discipline

It's a personal expertise of an individual at work where how an individual behave with other professionals on workplace and outside the organization. Moroever, Self discipline includes the activities of a realtor related on work about his timing in the office and arrangement of listing for clients and customers.  

The Art of Negotiation 

 Skills Real estate dealing or negotiations is an art in the realty industry because of money and high profit involve. Every brokers want to earn profit and where profit involves there people forget the ethics of business. The real estate market is different in different parts of the world and it does not mean ethics are same in all parts of the world. Moreover, As a real estate agent income and number of deals determined the ability to close the deal. Dealing and negotiations are an art and takes time to learn.
Please Read More about "The Art of Negoation Skills"

What is "The Art of Negotiation in Realty", Basic learning for realtors and customers?

https://shezglobalrealty.blogspot.com/2019/01/the-art-of-dealing-in-real-estate.html

What is "The Art of Negotiation in Realty", Basic learning for realtors and customers?

https://shezglobalrealty.blogspot.com/2019/01/the-art-of-negotiation-in-realty-basic.html

Interview Techniques 

To learn and expertise of interview techniques is very important for realtors to learn. It requires inside an office for the selection of candidates on workplace and secondly, Deal with customers and investors in beginning to understand "what customers are looking for in term of properties". There are three kinds of interview techniques are important in the real estate business.  

Emails

It's an interview where a real estate customer asks about information related to properties. As a realtor you have to ask basic questions about customer choice in term of residential and commercial properties. Realtors need to ask simple questions to attract customer to meet face to face.  

Interview on Phone

 Modern day people inquire about listing on phone rather than go and meet realtors face to face in until convesation. Realtors need to learn the art of interview to attract customers. Realstor Need to provide basic information about property to get clients to meet him face to face.

 Face to Face Interview

Realtor needs to be very friendly with customers when they meet face to face. Here realtors need to explain each and everything about the properties. More and more information about area, property, price and real estate market help realtor to go through with customers. 

Problem Solving

Skills Problem solving skills include dealing, prices and paperwork where customers usually make arguments with realtors. So realtors need to complete all work to avoid such issues on the workplace. 

Mathematics 

Mathematics includes plus, minuses and percentage.Realtors need to command on maths because customers only understand the language of full figures rather than math in parts. Investors just want to get information of profit and loss in whole numbers. This is where an investor ready to invest in real estate. Moreover, Realtors need to be specific about Return on Investment (ROI) before explaining to investors and real estate customers. 


 

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How Important is Insurance in Commercial Real Estate Property Investment?

Insurance In Commercial Real Estate Property

Insurance is a term use to protect different assets, tangible or non tangible things in the modern world. People in different parts of the world like to insure their expensive things, i.e. laptops, mobile phones, human life, home insurance and car insurance etc.The aim to insured things to overcome financial losers in real life. In first world the concept of insurance is very popular and people like to complete the process of insurance while in developing and underdeveloped countries the concept of insurance is new. Adrian Flux, State Farm,Commercial Combined Insurance, State Farm, Berkshire Hathaway, Liberty Mutual, Allstate Nationwide, Zurich etc. known as the top insurance companies in the united states and different parts of the world.

What is Insurance in Real Estate?

 Insurance in real estate is a system to protect assets like lands, shops, apartments and shopping malls. The world is unpredictable and environment is changing and human can only inform. while human are unable to protect equipments. Insurance is a term used to protect assets. The are different organizations which run real estate insurance. they have monthly and annual fees and when something happens in properrties these companies overcome the losses of individuals.

Why Commercial Insurance in Real Estate is Important?

Commercial real estate is always expensive in term of investments. People invest capital to get high returns in term of rents. Investment is the result of individual savings of the life. In world we can predicts natural disasters and can not protect completely human lives, structure and buildings. However, In real estate building can protects from natural disasters like in Japan or Indonesia consider the home of earthquakes there real estate building protects and build within the protection system. In Japan building are safe and flexible in earthquakes. Still tsunami and fire incidents can damage building. In commercial real estate such damages effects owners and tanents both.

Insurance in developing commercial real estate

Developing commercial real estate includes properties in structure and raw forms. Developing real estate is in the beginning process and loss of properties is lower than developed properties. Developing real estate includes land and building structure. land and gray structure can be damaged with low construction material and can be damaged with low quality work.It is very important for investors and general clients in insured land or building if they are buying after completion or going to construct themselves. In this type of real estate, insurance rates is low and give complete benefits. If land is not solid it takes high expensive, whereas, after following all procedures sometimes building can damage for many reasons such as storms, Floods, earthquakes etc. It's important to complete insurance process to protect the investment.

Insurance in Developed Commercial Real Estate

The developed commercial real estate includes commercial properties, i.e. shops, flats, studios, apartments, shopping malls and plazas. Developed commercial real estate is 10% expensive for developing real estate. Developed real estate takes time to complete the construction process. It is more important than developing real estate because of time and investment of individuals. Insurance is every essential for developed real estate to protect an individual asset.

What are commercial real estate, insurance rates?

In different parts of the world insurance rates are different from country to country, and complete with local currencies. In united kingdom home insurance starts from 100£ per year to 2000£ per years depend on the locations and value of the building and properties. In the united states it starts from 500$ to 1000$ per year.

Who are Commercial Real Estate Insurance Providers?

There are different insurance public and private companies provide different services of insurance in different parts of the world. Insurance companies works nationally and internationally i.e. The Hartford, Insure on, Insurance321, Nationwide and Allstate etc.

6 factors that affect the cost of business property insurance include:

Geography
Safety and Security
Size of Business Premises
Age of Building
Type of Equipment
Age of Equipment

Source https://www.investopedia.com/terms/c/commercial-property-insurance.asp

Top 25 Insurnace comapnies provide Services

The are top 25 companies which provide insurance services globally 

1. State Farm
2. Berkshire Hathaway
3. Liberty Mutual
4. Allstate
5. Progressive
6. Travelers
7. Chubb
8. USAA
9. Farmers
10. Nationwide
11. AIG
12. Zurich
13. Hartford
14. CNA
15. AmTrust Group
16. American Family
17. Auto Owners Group
18. Erie Insurance
19. Tokio Marine
20. American Financial
21. W.R. Berkley
22. Assurant
23. Fairfax Financial Holdings
24. Cincinnati Financial
25. Markel Corporation
Source : https://www.insurancebusinessmag.com/us/news/breaking-news/these-are-the-top-25-propertycasualty-insurance-companies-in-the-us-32630.aspx

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