Asset based loans are those types of loans that are secured by some asset, usually your house or car. This means, when you don't pay the loan, the asset (your house or car) is also taken. In this way, a mortgage on a home is also an example of an asset based loan.
When an investor is looking to buy property, he would first get an idea of how much he will be getting for the property and how long it will take to pay back the loan. If the property is going to be a rental, the money he gets from renting will be much higher than if it is for a profit. Therefore, he needs to find out the amount he will need to borrow before buying a property.
He will then go through all the properties available in that area in order to determine the best one for him to buy and the interest rate he is going to have to pay for it. Now, he takes the amount that he needs and calculates how much he has to spend every month in order to keep up with the monthly payments.
The lower the interest rates, the better it will be for him to borrow the money. The main thing though is that he is able to save money. The amount that he needs to borrow and the interest rate that he has to pay will make up the whole amount that he needs to borrow. In fact, some people find it cheaper to borrow this amount in a lump sum.
It is important that he knows the importance of a property, and that is why it is important for him to do some research about the area in which he wants to buy so that he can be sure that it is a good investment for both himself and the investors. Also, he has to make sure that it is near other homes, so that he can get some extra profit for every time the house is rented out. He should also keep the place clean and well maintained.
One of the most important things that you should remember is to not borrow too much in order to avoid a lot of problems later on. This is why you have to do your homework well in advance. Remember that you cannot get your hands on a huge amount in order to pay off everything quickly. You have to save and enjoy life now. Here is a link that will enlighten you more on the topic: https://en.wikipedia.org/wiki/Loan.