Besides helping you get cash for your note. We also help our clients in the state of California, Nevada, and Texas, with Real Estate Transactions, and Loans. Visit our Contacts page for more info. 

In addition we offer an array of information regarding Real Estate articles, and Mortgage information. We are constantly updating with new content and videos to inform you. In addition; any other articles you may be interested in reading about or videos you may want to see on this website. We urge you to send us an e-mail of your request

This is a great question. Why allow us sell your note? I understand that they're many businesses and individuals that are capable of selling your note, or better yet buying your note. It probably might be easier to take your note to a local bank and see if they might be interested in purchasing your note. That doesn't seem like a bad idea. What I can offer you is a much higher probability of finding the highest offer from 200 note investors to purchase your note instead of you seeking offers from one individual at a time. That's too much of a hassle and your time is more valuable than that, Let me do the hassling for you. Allow me to earn your trust. If you don't believe me try me.

        What is the best method of finding these note buyers? I will be willing to put my head on a chopping block that the classified ad in the newspaper is not the best option. Most individuals looking to purchase monthly payments don't look in the newspaper.

        Recently the trend is to browse the Internet to find cash flow purchasers/ Note Investors. Using keywords such as "buy my note" or "buy monthly payments" at a popular search engine website should lead to many interested buyers. The thing is there are so many potential buyers that this may become difficult and frustrating to figure out where to start. In addition, Note Investors have different financial needs; a note that meets the needs of one person perfectly may not be attractive to another. Sometimes it is best to work with a note finder (like me) to help with your selling and try to find an offer that best benefits you. Allow me to earn your trust.

What Is Seller Financing?

Seller financing is when a seller helps to finance a real estate purchase by carrying back a second mortgage of even carrying back the whole purchase price (this is feasible when the home is owned free and clear). Usually sellers do this for buyers who cannot meet the qualifications of obtaining a bank loan or if the seller wishes to collect interest payments.

The Seller Finance Solution

Seller financing can be an alternative of getting a house sold without reducing the asking price. By recognizing the number of people in this market who can't get traditional financing as potential buyers, property sellers, and their agents, can minimize their time investment in getting a property sold. Sellers who offer financing can possibly get a higher asking price. This shows to be a nice win-win situation to the seller, and buyer.

Most home sellers never consider financing the buyer directly because they are not aware of the advantages.

            Three Advantages

Advantage #1 - MORE BUYERS.

How does this work. When a seller lists his/her house on the market and adds "OWC" - Owner Will Carry - this will make the house stand out and attract more buyers (This can be helpful when there are many houses on the market. Similar or not.). Because the potential buyers who cannot get funding from a bank, offering seller financing will open the doors to these prospective, thus increasing the pool of potential buyers.

Advantage #2 - MORE MONEY.

Offering seller financing can offer the possibility of selling at a higher price. If that is not the case, then collecting interest payments will bring you more revenue and higher profits.

Advantage #3 - LONG TERM PROFITS

I explained a little bit in Advantage #2 and now in further detail. When the seller finances the buyer, they get to act as "the bank". This means the seller could structure the deal to collect interest. Over time, if the seller holds on to the note, this can add up to thousands, even tens of thousands of dollars in additional income.

            The Seller's Strategy

Even with these advantages to "carry back financing" lending are made clear, many sellers are still hesitant to offer financing because they are entering unfamiliar territory. It's a natural, human response -- everyone is uncomfortable with new things.

For many property sellers, considering owner financing when they've only dealt with buyers via traditional funding is definitely "thinking outside the box". But once sellers understand the process, they are likely to choose seller financing instead of the unattractive option of cutting the listed price or waiting indefinitely for the "right buyer".

A seller-financed real estate sale is simply a real estate transaction where the seller acts as "the bank" or lending institution. The seller sets the sales price, determines and accepts a down payment, and then finances the remaining balance. The final step is the part that may scare some sellers, but in actuality, it can be very simple. Here is an example.

If the sales price is $100,000.00, and the buyer gives the seller $10,000.00 cash (the agents fee will be deducted from this down payment), the seller will finance the balance of $90,000.00. The buyer and seller would then agree to the terms, such as the interest rate and the total term, and use an attorney to create the mortgage document and close the deal. From that point on, the buyer sends the seller monthly payments for the house he/she has just purchased.

Special Circumstances (and a Solution)

The whole process can really be that simple. But, there are some substantial differences between a seller-financed deal and one that relies on traditional bank funding.

First of all, the seller in this example does not receive a large, one-time payment at the time of the sale. In fact, they will only receive the down payment, and in some situations, most of that will go towards paying the real estate agent's fee. On the other hand, the seller will be receiving monthly payments at a decent interest rate, but this income stream can't be used as a down payment for a new house.

Since many home sellers are also looking to buy another property, the seller will need to get enough at closing to pay their own down payment. Without this payment, the seller's hands will be tied when they look to purchase another house and need to have a substantial amount of funds available. There is a common solution to this issue, however.

The Solution

In order to get the money the seller needs from the loan they just created, the seller could sell the monthly note payments to a specialist buyer for a lump sum of cash. If the seller finds someone willing to buy the payments, now they can "have their cake and eat it too".

Summary.

Step One: Use the seller finance option to find unique customers willing to buy the house at a higher price than would have been possible otherwise and complete the real estate transaction quickly.

Step Two: Decide on the terms of the deal and create the note.

Step Three: If the property seller needs immediate cash to buy another house or for any other reason, their new incoming payment stream can be resold. The person who buys the future payments from the seller will provide the funding to act as a down payment on a new house, and every party involved in the deal comes out smiling.

The answer is yes! Or you should at least consider in investing in real estate between now (This article was written in March 2008) and the next few months. And we will tell you why.

There is so much supply and not enough demand

By rule of simple economics, when there is more supply than the demand can meet. Prices must come down. Same goes the other, when the demand exceeds the supply. Prices will be higher (hope that wasn't too elementary for you).  It seems that every block you drive in there is a house or two for sale. And with so many houses on the market, sellers, and realtors are becoming more desperate to sell. If you are a qualified buyer, it makes logical sense to submit an offer below (or even way below) asking price. The offer you submit to the seller is entirely up to you, your budget, and what you feel the house is worth.

The amount of time it takes to sell a house

Like it was said in #1, sellers and realtors are becoming more desperate to sell. Realtors are not seeing the constant flow of commissions like they did a few years ago, and sellers are losing their homes due to adjustable mortgages and would want nothing more than to get their house sold. Since homes are taking a lot longer to sell (90 days or longer), and slashing prices are used to motivate buyers. It doesn't hurt to submit an offer below asking price and if they accept, GREAT! If they reject, GREAT! Because it doesn't affect you, and there is still plenty of inventory to shop around.

Banks want to lend money and not hold on to the house

When you see a bank owned property for sale. These are going to be golden in the near future, if not now. The way banks make money is when they loan money and collect interest (once again, hope that wasn't too elementary for you). Common sense tells us banks are not making money, if they are not lending, and if they have to hold on to the property until it is sold. In addition, more bank owned properties are going to take place. What does this mean to you? A better deal for you, banks must perform a short sale (sale of real property where the fair market sale price is less than the loan balance) to get a property sold. This benefits you, because you have the upper hand, and you tell the bank what you are going to pay. Then it is up to them to take it or leave it. Once again, submit an offer below asking price.

Interest rates are more in your favor

Everyone has been hearing about the Fed cutting down interest rates to stimulate the economy. And judging from what we are experiencing, they might even continue to cut rates even more. Do we know that for sure? No! But the way rates are today and home prices are continuously decreasing it is definitely a good time to look into buying real estate.

Conclusion

Whether you are deciding to invest in a home now, or you would prefer to wait to see how the economy affects prices is entirely up to you. We at HacheFinancial just want to point out the reasons why now, or maybe later on, is the time to consider investing in a home. We hope you found this article informative and beneficial. If you have any questions about qualifying for a loan, you can click on the CONTACTS link or check out our Home Buying article. Allow us to earn your trust.

It's a different world out there. How can one feel confident purchasing a home when an increasing number of banks are closing their doors or filing for bankruptcy? How can one feel comfortable purchasing a home when it is said that so many loan officers put their clients in adjustable mortgages and they are now losing their homes because of it? Let's not forget the number of defaults and foreclosures rising. How can one feel motivated to invest in a home when lending guidelines are becoming stricter (as a result making it harder to qualify for a loan)? Last but no least, if an individual did want to invest in a home, given that lending guidelines are stricter, how can one qualify to buy a home? Let's explore your possibilities and options.

How can one feel confident purchasing a home when an increasing number of banks are closing their doors or filing for bankruptcy?

Great question, it is tough to overlook this fact. But how can you, as a consumer, feel more confident about purchasing a home? Well, using a lender that happens to be a brokerage firm (An individual or company that shops around with different banks to provide the best financial terms for their clients) provides a lot less stress and headache for you. They do the work for you and give you the numbers. You, as the client, can accept, reject, or go somewhere else.

Purchasing a home with a down payment will definitely help with your home purchasing experience. The larger your down payment, the better your interest rate and terms, and banks will become more competitive to make the loan.  A good down payment is about 5% of the homes value. A real good down payment is anywhere from 10% and up.

FHA loan limits have increased which is definitely to your advantage. To check the FHA limit in your location visit http://www.fhaloanlimits.com/. Since FHA loans limits have increased, this will allow low to moderate income to qualify for homes without making a large down payment. The down payment required is 3% and that can come from a family member or gift.

How can one feel comfortable purchasing a home when it is said that so many loan officers put their clients in adjustable mortgages and they are now losing their homes because of it?

Once again, another great question. Things like this give lenders and realtors a bad reputation. So how do you go about choosing a loan officer? It's always great to go off a referral from a friend, family member, and even a trusted realtor.

Another way that can help with choosing a loan officer is to go based on his or her years in the business.  A good loan officer will be knowledgeable about the programs that are offered. You can check the Better Business Bureau, Rip-off report on the company, or individual loan officer name, to see if there are any pending lawsuits, poor business practices or anything floating around. You could also do a Google Search on the company and/or loan officer's name in quotes to see if any bad articles or information is floating around.

Be wary of a loan officer that promises the world to you. An experienced loan officer will under promise and over deliver.

How can one feel motivated to invest in a home when lending guidelines are becoming stricter?

This depends entirely up to you as the buyer. If you read the other article, "Is Now the Time to Buy Real Estate," then hopefully you realize that now, or in the near future, is the time to look into, or at least consider,  investing in real estate. Prices are coming down and there is reason to believe that prices will continue to drop. Not to mention interest rates are low, and more in your favor.

Now let's address the stricter guidelines part. What banks want to see before they lend you money is they want to verify your income. Those 100% stated loan programs are in the past. Banks want you to provide a down payment of at least 5% (3% if it's a FHA loan program), verify your income, assets, and would generally love to see a credit score of 680 or above (a little below 680 will work but your down payment and yearly income has to meet their standards). If it is a FHA loan program, you can probably still qualify with a credit score as low as 540 given the condition that your income meets the banks standards. What do we mean by your income must meet the banks standards? Lets say combined you and your spouse make $10,000 a month. 33% to 40% of you and your spouse combined monthly income may be used toward your mortgage payment ($3,300 -$4,000). In other words, banks do not want to see more than %40 of your combined monthly income going towards your mortgage, and they will want to see your paystubs for 2 to 3 months to verify how much house you can afford.

How can one qualify to buy a home?

We addressed a little bit on how to qualify and what banks are looking for in general. Now let's say you would like to improve your credit score to better prepare yourself to obtain a more favorable loan program whenever you are ready to invest in real estate. Here are some tips on improving your credit score.

Pay your bills on time

Delinquent payments can have a major negative impact on your score and the longer you pay your bills on time, the better your score. For example, someone with an average credit rating of 707 can raise their score by as much as 20 points by paying all their bills on time for one month.

Keep balances low on credit cards

High outstanding debt can affect your score. Maxing out your credit cards could lower your average score by as much as 70 points.

Don't open a number of new credit cards that you don't need

New accounts will lower your average account age, which could actually lower your score by up to 10 points.  In addition when you apply for new credit, that is a credit inquiry and too many inquiries can have an affect to your score. A general rule is the less inquiries you have on your credit report, the more it can influence your credit score to increase.

Have credit cards - but manage them responsibly

In general, having credit cards and installment loans (and making timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.

Closing an account doesn't make it go away

A closed account will still show up on your credit report and may be factored into the score.

         http://www.cnnmoney.com/

Saving money for a down payment will definitely help you to qualify for a loan and will help make your home more affordable. For some, saving for a down payment is easier said than done. In the article 6 Tips How to Profit In a Declining Economy, specifically on tip #6, some money saving tips are listed. In addition here are some other websites you can check out to that talk about, and give tips on saving money.

http://www.feedthepig.org/

http://www.moneysavingexpert.com/

For those who want to get creative with your home purchasing. You can find homes for sale that say "Owner Will Finance" or simply ask the owner if he or she is willing to do seller financing. If you have any questions about what seller financing is, you can visit the FAQ section, or read the Seller Finance Solution for more information.

Conclusion

We hope that you found this article informative and helpful. If you have any questions please feel free to contact us or e-mail.  Thank you and allow us to earn your trust.

A Budget Was Not Planned

Your mortgage payment shouldn't exceed 33% of your combined monthly income. By following this principle should allow you to fund other important items such as retirement savings, your kid's education, and your entertainment budget.

What if you have a lot of kids, or you like to travel a lot? You've got to ask "How is this purchase going to affect our monthly spending?" You have to look at all of your monthly expenditures, and then determine what percentage of your income can go towards your mortgage payment.

Banks generally want to see no more than 43% of your monthly income going towards debt. This includes your total monthly debt (credit cards, car payments, student loans, etc), and your mortgage. If you want to get a general idea on how much house you can afford, visit this website http://www.mortgagecalculator.org/. If you want to get more detail with your home qualification then I suggest you talk to a lender, or click on the contact us.

Picking the Wrong Mortgage

Pick your financing package with care. Among your choices: adjustable rate mortgages, ARMs, and the more traditional fixed-rate mortgages. These days, 15-year fixed mortgages have appealed some interest to buyers. Keep in mind that shorter-term mortgages will cost more per month since you're paying off your loan faster. Monthly mortgage payments on a 15-year fixed loan typically run 25 percent higher than the 30-year option.

Personally, I recommend a 30 yr mortgage, it's more traditional and you know what you are going to pay every month while reducing your principle. Interest only mortgages are tempting because it's more affordable, but you do have to realize that you are not reducing your principle balance. I recommend interest only and ARM loans for investment properties that you plan on flipping but not on your primary home.

First-time home buyers may qualify for a program through Fannie Mae, FHA loans that requires lower down payments and easier qualification limits than standard loans.

Picking an Undesirable Community

Some places are just flat-out expensive, and you'll probably have to search for a location that's affordable. That doesn't mean you should choose the cheapest location.

If you don't like the location you'll be unhappy. In addition, you'll probably have a hard time selling your property if the community isn't that desirable. Drive around the community and read the local papers to get a better grasp of your potential area, Ask around and see what the community has to offer, how many resources it offers.

Don't neglect the schools. Gather as much information as you please about test scores, statistics on the percentage of kids who graduate and go to college, the student/teacher ratio and so on. You may also want to talk to parents and students to get the inside scoop.

You Must Know What Your Home Is Worth

The best way to determine if you're getting a fair deal is by comparing the cost of the home you're interested in with similar homes in the area. You can do this easily by having your Realtor provide you with a CMA (that's short for Comparable Market Analysis). A CMA lists such things as addresses of recently sold homes, prices, date sold, the number of bedrooms and bathrooms, and ideally, such things as the home's condition, its size and extra features.

Bad Realtor Experience

You want a buyer's agent who works for you and understands your needs and financial limitations.

References from friends can help you find a good pro. Interview three, and ask to see their activity lists, which reveal every property the agent sold (or whose clients bought) in the past year. I also mentioned you may even want to Google their name in quotations to see if there is anything you can find on them. Make sure the agent has significant experience in the area where you want to live and the price range that you're looking for.

We Should Have Went Back and Check the Neighborhood

If you're like most homebuyers, you probably spend many weekends looking for a new home in other neighborhoods. But what happens to the neighborhood on weekdays or after dark? Is the house that's "convenient to town" sitting on a main thoroughfare that fills up with cars come commute time? The only way to answer these questions is to go back and see what the neighborhoods like at various times of the day and week. Do your neighbors spend weekends with that loud stereo system playing inconsiderately? You want to know as much about the neighborhood as possible before you buy.

 Forgot to Consider Resale

It's easy when you're house hunting to forget what it's going to be like to sell your home down the road. But as you tour homes, put yourself in the perspective of the sellers. You may be drawn to a home that has features like or no closets or just one, tiny bathroom. But others may not be as enthusiastic. When you buy, think about the day it comes time to sell, or the future expense of upgrades you may later want to implement.

Buying the Most Expensive House on the Block

It's wonderful when you find your dream house, but if it's the most expensive home on the block you could have a problem. Quite simply, your neighbor's lower home values will most likely lower your home value. Remember, people who buy a $500,000 home usually want to be surrounded by other $500,000 homes, not homes with lower values that can affect the value of home.

You didn't do an inspection

Bottom line: you should never buy a home without having it inspected! After all, you don't want to learn that you've bought a house that's filled with termites or has a frazzled electrical system. If you're building a new home, an inspection can ensure that all the work has been finished properly.

Home inspections typically run $300 to $600 and usually include a check of a home's heating and air condition systems, plumbing and electrical works, roof, walls, foundation/structure, drainage, the garage and basement.

What's frequently not covered? Termite, radon, asbestos, mold and lead inspections. Don't rely on inspectors to hire other pros to check for these items.

Most home inspectors will describe what they do and what they don't do. It might be a good idea to ask what standards do they work to.

Underground heating oil storage tanks also should be inspected before you buy since leaking tanks cause huge environmental, legal and financial problems. (A seller's disclosure statement should reveal if there's an underground tank on the property.) The Environment Protection Agency has tank guidelines for homeowners, plus contacts at state Department of Environmental Protection offices so you can find pros to help.

Finally, it's unwise to hire a home inspector who is recommended by a Realtor, since they're likely to refer you to a pro who won't kill a sale. Instead, use recommendations from friends or family.

You forgot about closing costs

Closing costs typically run about 2 to 5 percent of the home's purchase price.

A mortgage lender should provide you with a specific estimate of what costs will be. But keep in mind they include such things as origination (points) on a loan, escrow fees, title and homeowners insurance, legal costs, property taxes, fees to record your need deed and notary fees.

If your mortgage is ready to adjust, and you have to refinance, you may have notice that it is very difficult, if not impossible to refinance for obvious reasons. Decrease in home values and tougher lending guidelines make it next to impossible to refinance.  And since you can't refinance, it leaves you with the option of selling your home for less than what you bought it for (short sale). Keep in mind that if you put your house on the market, it's not going to sell as quickly as it did in the good ole days.  In addition, the amount of buyers that can qualify with the new lending guidelines is significantly smaller. So what does this leave you with if you are in this position? You can submit a LOAN MODIFICATION.

What is a LOAN MODIFICATION? A Loan Modification is a change in one or more terms of your mortgage loan, which results into a mortgage monthly payment that you can afford. You may be saying to yourself, "This is too good to be true!" or, "How does this work?" Don't worry. We will explain.

Loan Modification works like this. Let's assume that your mortgage payment is about to adjust to a new monthly payment that you can't afford. Given that you already tried to refinance and the option of selling your home is not looking so promising. You visit a loan officer,  fill out a Loan Modification form that will ask you questions about your income, expenses (not including your mortgage), and your savings. Please answer honestly. Then whatever is left over from your monthly income is what you can afford to pay monthly for your mortgage upon the banks approval.

To give you a better understanding, let's assume Mr. and Mrs. Jones combined gross monthly income is $5,000. They save $400 a month for retirement, and their monthly expenses is $2,600 a month (bills, entertainment, food, car, student loans, insurance, etc. Keep in mind they are not including their mortgage in the form. The purpose of the form is for the lender to know how much a month the Jones can afford). $5,000-400-2,600 = $2,000 a month is what the Jones can afford. If the bank approves, then $2,000 a month will be their new mortgage payment for a certain period of time.

Loan Modifications benefit you as the consumer because it saves you from foreclosure, it also saves your credit, and you get a new monthly payment that you can afford.

Conclusion

If you, or someone you know needs more information on Loan Modifications. You can submit an e-mail to us in our Contacts link or call your trusted lender. We hope you found this article informative and beneficial to you. Thank you.

hachefinancial;

I will be soooo happy if i see this posted on the website! I read all the negotiating lessons and i felt that they were very helpful. I do agree that learning negotiating is a never ending and vast subject. There is soo much to learn from it and i also agree that people differ with their negotiating skills. One thing i would like to offer to whomever reads this in negotiating, in theory, the first person that presents a price, looses. When negotiating with the other side. You want them to give you a price before you give them a price, because since they presented the price first, in theory, they will be more eager to bargain/negotiate. If you post this hachefinancial I WILL GREATLY APPRECIATE IT

Ralph

I enjoyed reading Negotiating Lessons 1 through 4. One tip I would like to add is DON'T EVER ACT TOO INTERESTED. Just giving the impression that you are willing to walk away can do wonders for getting a better deal. I learned to show interest, but at the same time show that you are also willing to walk away if the deal isn't right. That way they won't play you for a sucker.

Luis

Welcome to Negotiating Lesson 1! A series of articles explaining tips on negotiating. Lesson 1 we will provide some basic tips on negotiating, then in later lesson we will offer more advance negotiating tips.

IT DOESN'T MAKE SENSE TO BARGAIN OVER POSITIONS

How many of you are guilty of this? Come on, come on don't be shy. The honest answer is many of us. Many of us on a regular, bargaining basis engage in positional bargaining. Each side takes a position, argues/defends that position, and hopefully the other person (hopefully not you) gives in. Or maybe you might be the one that gives in. Here's an example of positional bargaining. "If you want to go to the movies with me, we are watching 21 or nothing at all."

As you can see positional bargaining can strain and sometimes even shatter the relationships between the parties involved. Bargaining should lead to a wise agreement that each party involved can cope with. Bargaining should be time efficient. And it should improve the relationship(s), or at least not damage it.

Does this that you must be nice when you negotiate? NO! We acknowledge that being nice is a more gentle style of negotiating that leads to an agreement in an efficient manner, but being nice is not the answer because it makes you vulnerable to someone who happens to be the positional bargainer.

Then what is the alternative if Positional Bargaining and Soft Bargaining are not the answer? Somewhere in between of hard and soft, in the middle, someone that bargains on principles is the alternative. Some basic principles are:

1. Separate the people from the problem.

People should deal with the problem and the people separately. Taking positions makes things worse because people's egos get in the way. We should be working together, side by side, attacking the problem, not each other.

Positional Bargainer: The other party is my enemy

Soft Bargainer: The other party is my friend

2. Focus on the interest, and not the position.

Compromising between positions is not likely to produce an agreement that may suit your interests.

Positional Bargainer: Focused on his/her position

Soft Bargainer: Looses focus on his/her interest and gets the bottom line

3. Come up with some possibilities before making a decision.

Having more than one option helps you to decide on a solution, or spark your creativity to create more options that will help you to a decision.

Positional Bargainer: Demands only one possibility

Soft Bargainer: Accepts one-sided loss to reach an agreement

Conclusion

Hopefully we explained clearly why bargaining over positions does not make sense. And we hope that the 3 principles of negotiating sparked other alternatives to consider for your future negotiating. We will further expand on these principles in our other articles. Thank you for reading Negotiating Lesson 1! Look out for Negotiating Lesson 2 SEPARATE THE PEOPLE FROM THE PROBLEM.

SEPARATE THE PEOPLE FROM THE PROBLEM

Easier said than done right? We all can agree that it is hard to deal with a problem without people misunderstanding each other, and taking things personally. For example, a friend of mine got his car towed because he parked in a NO PARKING area. When he got the contact information and talked to the other person on the line. Some words were exchanged that shouldn't have been exchanged. My friend had forgotten that he broke the rule, not the person that he was speaking with. His emotions took complete control of him and he blamed the other person, not himself, because remember he did park in a NO PARKING zone. I understand that this example had little to no relevance in negotiating but I just wanted to point out how out emotions can sometimes get in the way.

A basic fact about negotiating is that you are dealing with the representative of the other side. Whether it be a used car salesman, a banker, loan officer, and etc. But keep in mind that the representative you are dealing with does have emotions, values, different viewpoints, and are human beings. This basic fact of negotiation can be helpful to you because in negotiating, trust, respect, understanding, and friendship are built and will lead to smoother and more efficient negotiations.

On the other hand, people do get angry, hostile, frustrated, offended, and many other emotional reactions if you, or the other party, fail to deal with the others sensitivity as human beings.

Everyone involved in a negotiation wants to reach an agreement that satisfies their interest. In addition, a negotiator may have an interest in building a relationship with the other side. For example, a Loan Officer wants to make a profit, and give his client the best deal possible, and hopefully that client will do repeat business with the same Loan Officer.

Why do people have a hard time separating the people from the problem?

Egos tend to be involved in negotiating, sometimes emotions can take over. Remember the example with my friend having his car towed? That is a good example of how we treat the problem and the people as one, and when that is the case, it is tough to separate the people from the problem. Another example would be a statement such as "Why is this house such a mess?" is intended to solve a problem, but most likely will be interpreted as a personal attack and people can react in a defensive manner.

What techniques could you use in Negotiating to help separate the people from the problem?

Put yourself in their shoes

The ability to put yourself in someone else's shoes is one of the most important skills anyone can posses. With any important skill, this does require some practice and effort. If you are able to understand the other person(s) point of view, you are able to influence them. To truly master this skill you must be able to withhold your judgment while you try to put yourself in their shoes. Granted they may believe that their views are "right" as you might believe your views are right too. Don't get me wrong. Understanding the other person(s) point of view is not the same as agreeing with them. A better understanding of the other person(s) thinking may lead you to rethink your own views in the situation, which is not a bad thing. It's a great thing because this reduces conflict.

Don't Blame Them for Your Problem

This is so easy to do. I am even guilty of this myself as well as many others. It's especially easy to blame when the other side is responsible. Even if the other side is to blame, blaming them is usually counterproductive, because the other side will become defensive, resist what you have to say, they will not listen, and/or they will attack back (remember when I say people have ego's and emotions that can easily be flared?).  One way to get around blaming is to discuss each other's perceptions by making them explicit. This should be done in a frank and honest manner without blaming the other side. This discussion may provide the understanding they need to take you more seriously. For example, let's say you bought a used car from a dealership that breaks down on you the first month for whatever reason, and then you take it back to the dealership. The individual that blames would say "How could you sell me a piece of crap!" Can you see how that salesman can react in a hostile way? He probably won't listen to you and will attack back, plus he may truly be unaware of the mechanics of the vehicle.  The person that discusses his perceptions would say "I bought this car a month ago and now it broke down. I know it's not your fault, but I feel it's not right for a car to breakdown in its first month. Would you agree with me so far? How can we resolve this problem? Or should I exchange the car?" You may not say that word for word but do you see the difference? If you were the salesman, which person would you rather deal with? Hopefully you say the person who discusses their perception.

Make Emotions Explicit

Talk to the other person about your emotions and make sure you listen to theirs. What I mean is let them know how you feel given the situation. For example you might say, "The people on our side feel mistreated and are concern that an agreement will not be reached. Whether it's true or not, that is our concern. Personally, I think we can come to terms, but that is the feelings that they have. Do the people on your side feel the same way?" Making your feelings, and theirs explicit allows for the negotiations to be less reactive and more pro-active.

If emotions become too explicit and the other wants to let off some steam, let them do so. Allowing the other side to let out their steam can make it easier to talk rationally later. The best strategy to this is to listen without responding, and encourage them to continue until their last word is spoken. In addition you DO NOT want to react to their emotional outbursts which can lead into violence if not controlled. I'm sure you can agree we don't want that in a negotiation.

Remember an apology can be the least costly and most important in defusing emotions. Even when you do not acknowledge personal responsibility for the action or intention that has been caused.

Communication

There is no negotiation without communication. In negotiating we communicate back and forth until an agreement has been reached. We all can agree communication is never an easy thing. Couples with many years of marriage still have misunderstandings in their marriage. I can tell you right now, the bigger the group in negotiation, the tougher it is for everyone to communicate and be understood. It is best to limit the size of the group.  What else can be done to ensure that we communicate better with the other party?

Listen Actively

Listening is obviously important in negotiation and in other things, but it is difficult to listen well. Some basic techniques of good listening are to pay close attention to what is being said, and ask the other party to spell out what they mean. Then acknowledge what they say. You don't necessarily have to agree with them but acknowledge that you heard what they said and meant. Request that the ideas or statements be repeated if there is any uncertainty.

When the other side explains their idea, before you counter their idea and risk them believing that you didn't listen to them. Acknowledge what they said like this, "You have a strong case. Let me see if I can explain what you said. The way I interpreted is ...." Repeat what they said, then after you explained to them what they explained to you. You can them propose an alternative or a problem in their proposal. This minimizes the chance that you misunderstood them and it strengthens communication between you and the parties.

Speak For a Purpose

Before getting into a negotiation and making a statement, know what you want to communicate or find out, and know what purpose this information will serve you.

Conclusion

I hope you see why we sometimes treat people and the problem as one, and why we should separate the two. I am positive you found these tips helpful and you would like to implement these tips next time you negotiate, whenever it may be. Deal with people as human beings and the problem on its merit. This will allow negotiations to become smoother and more efficient. Remember, when a relationship is established, it may save you time and money on your next negotiation with that person. Look out for Lesson 3 FOCUS ON THE INTEREST, NOT POSITIONS article.

The basic problem in negotiating  are when parties conflict between each others needs, desires, wants, fears, concerns, and etc. For example, you see a house for sale for $350,000. And you offer the seller $330,000. Then the seller counters and says he cannot accept anything less than $350,000. You react by responding, "I won't pay anything higher than $330,000!" Do you notice anything in this scenario? Doesn't it seem like the seller and buyer are focused on their positions? The seller says he won't pay anything higher than $330,000, and the buyer says he cannot accept anything lower $350,000 and that's their POSITION. What if the buyer took the time to understand the seller's interest such as why is the seller selling the house, what he needs the money for, and etc. Then the buyer discovered the seller is going through a divorce and needs at least $340,000 to settle with his wife. Despite earlier in the example the seller said he cannot accept anything lower than $350,000. What I am trying to explain is when we focus more on the other side's interest, you can use that to your advantage and you may come to terms more smoothly and efficiently.   

How Do You Identify the Other Parties Interest?

As stated, the benefit of understanding their interest is clear, but going about it is not so clear. Some interest's of the other party, in most cases, is not so explicit and figuring out their interest  will help come to terms more smoothly, and give you some leverage in the negotiating process.

Ask "Why?"

In other words, try to put yourself in their shoes. Just like in the Seller and Buyer example. If the seller tried to put himself in the buyer's shoes, and asked questions such as, "Why are you selling the house? How did you come about the asking price? Is the price negotiable?" Or whatever questions that are asked to find out the buyers interest. The buyer could have found out that the seller is selling his house because he is going through a divorce, he based the price on houses being sold in the neighborhood, and the seller is willing to accept $340,000. Asking questions to understand their feelings, needs, wants, and etc is a good way of trying to identify their interest.

Understanding Basic Human Needs

Some basic human needs are

• Security
• Economic well-being
• Control over one's life
• A sense of belonging
• Recognition

(Getting To Yes, Negotiating Agreement Without Giving In, by Roger Fisher and William Ury)

In many and sometimes all negotiations we tend to think that the only interest involved is money. Not entirely true, but I do acknowledge money is a need (We all need money), but money is the underlying basic human need of Security. Just like in the seller and buyer example, sure the seller was asking $350,000, but all he needed was $340,000 to settle the divorce. Money was involved because of the asking price, and personal reasons the seller may have, but in order to feel secure and control over his life the seller needed $340,000. Understanding these basic human needs will help you understand the other sides interest, and can help come to terms of an agreement.

Express Your Interest

In negotiating you want the agreement to serve your interest. The chance of that happening increases when you communicate your interest. The other side may not know your interest, and you may not know their interest. But by communicating your interest allows them the opportunity to communicate their interest. Be sure you listen and acknowledge their interest to avoid any friction. And when the other side expresses their interest, be sure to give positive feedback/support whenever is necessary to encourage them to express their interest and you will obtain more information.

Conclusion

Hopefully we clearly explained the benefits of focusing on the interest and not the position. As a final tip, you can't expect the other side to listen to your interest if you don't listen to their interests. This will encourage them to be more open to your suggestions and options. We at HacheFinancial understand that the negotiation process is very complex and unique (Given a situation and scenario). Which is why we encourage you to submit your negotiation experience, your negotiating tips, and suggestions in negotiation to HacheFinancial through our email (In our Contacts Link). HacheFinancial will review it and may post on our site. We encourage this so that others could benefit from each others experience and learn from one another. We look forward to your responses. Thank you for reading.

P.S. Look out for Negotiating Lesson 4 Come Up With Some Possibilities Before Making a Decision.

Having options in negotiating is very valuable, because when you have options, you have choices. Granted some would rather have that ONE RIGHT ANSWER because it's easier. Choices enhance our ability to choose the best alternative. Wouldn't you agree? So many times we, as people, are so focused on the "one right answer" that we forget that other alternatives do exist that may serve better.

It can be a number of reasons why we think there is only ONE SINGLE ANSWER in negotiating whether it be our premature judgment or whatever else it may be. It can probably be because we just want to come to terms and go on about our lives. Let's talk about ways of developing alternatives in negotiating.

Brainstorming

We couldn't get any simpler than that. Brainstorming with the other side (As well as with yourself) can prove extremely valuable. Joint brainstorming has great advantages of producing ideas that take into account of the parties involved. Brainstorming creates an environment of problem solving, and educating each other about your concerns. It's good business practice to give 2 alternatives to a decision to avoid appearing committed to an idea.

Expert Opinion

This is another way to generate multiple options. Obtaining advice from different experts and professionals is very valuable if it is at your disposal. Professionals are professionals for a reason (or at least we hope).

Look for Mutual Gain

Doesn't it seem like in negotiating that some one is always trying to "Stick it to the man"? Or if one wins, then the other loses. Maybe in marriage (I am only joking), but in negotiating there is one thing that you must remember as a consumer. The other party wants to finalize a deal just as badly as you do, if not more.  One way to go about looking for a mutual gain is to identify each others shared interest. Inventing an idea that meets their interest as well as yours is great for both parties (Lesson 3 elaborates how to identify interest).

As far as looking for mutual gain goes, when a price is presented to you.  Always ask, "CAN YOU DO BETTER?" in a non-threatening, mutual manner. Chances are they can do better.

Make Their Decision Easy

We do not mean making threats to the other party. At times it may be tempting. You want to propose the other side with a choice that is as painless as possible. It only helps their decision a lot easier. Making their decision easy is as simple as understanding their interest (Lesson 3). When you present them a choice to make that appeals to their interest and merits, or at least as close to it as possible, it makes their decision easier, and an agreement will be reached.

Conclusion

Having options allows you and the other party a higher probability of selecting the best alternative that best suits you and the other side.  This is the last of our Negotiating Lessons but we STRONGLY ENCOURAGE e-mails about any other negotiating tips that you would like to share, experiences, and suggestions. We may post them on our website so that others can benefit from one another and learn. Negotiating is a skill that we all need to be familiar with. Some individuals possess stronger negotiating skills than others, and we would honor the opportunity of reading your e-mails on your negotiating tips so that we may share them with others. Thank you for reading all 4 lessons and we look forward to your responses.

Is one of the best income generating investments that you can ever make. Commercial real estate offers something that residential real estate doesn't offer. WAY MORE MONEY EARNING POTENTIAL! Think of it like this. Residential real estate, like a single family residence, a duplex, or a 4 unit offer great monthly income, but the only downfall is the maintenance, and dealing with the tenants. With commercial real estate, once you have the property rented, you don't have to worry about maintenance, because the tenants deal with all of that. In addition to all the tenants' responsibility for the maintenance, sometimes tenants make upgrades to your property for the aesthetic purposes of their business. Not to mention the long term leases your tenants may have in commercial real estate. Unlike residential real estate the tenants stay tend to be short term, but in commercial real estate your tenants tend to stay for many years. Sometimes even longer than the term of your loan, and who would object to your mortgage being paid by your tenant, and collecting an income from it? I sure wouldn't object to that.

Commercial real estate includes many different forms of properties. Most individuals think of commercial real estate as office buildings, and industrialized units. Let's not forget that commercial real estate is also: any number of apartment units that is 5 and higher, health care centers, hospitals, retail structures, warehouses, and more.  If you owned a commercial building of any of the ones listed above, could you see the income potential in investing in commercial real estate?

Not only does commercial real estate holds its value well (even in a declining/ recession economy), but the potential cash flow is incredible. For example, I have a friend who bought a 30 unit apartment complex in Tennessee for a little under a million dollars. Imagine the amount of money he will profit if he charged each tenant living there a $1,000 a month. That will well cover his mortgage and he is pocketing over $20,000 a month. In addition, he checked with the city to find out what other construction will be going on nearby. It turns out a military base is going to be built 5 miles away from his property as well as a few shopping centers. This will only add value to his property and attract tenants. By the way, let's not forget about the length of the lease when you are dealing with office buildings, industrialized units, hospitals and etc. You mortgage note will basically pay for itself and some, because of commercial real estate.

I'm going to keep this short but hopefully this article triggered your interest about the income potential towards commercial real estate. There will be additional articles relating to commercial real estate that will talk more in depth about what to look for in investing in commercial real estate, tips on financing commercial real estate so that you can be prepared, and protecting yourself from additional troubles owning commercial real estate. Very broadly said but we will further expand in future articles. If you have any questions please feel send us an e-mail in our contacts link, and we may post a Q & A's link so that other visitors can learn and benefit from. Thank you for your time.

So you want to invest in commercial real estate? Not a bad choice if I may add. Whether it is you want to develop commercial real estate or buy commercial real estate. This article will provide some helpful tips to aid you with your search.

Metropolitan Area

Some developers or investors in commercial real estate typically work in their hometown or pretty close to it for reasons of familiarity. In some cases, individuals are even searching out of their hometowns for opportunities in commercial real estate. Some things to look for in developing or investing in commercial real estate are

•1.       1. Cities whose need for commercial real estate or housing has not been satisfied. Cities with availability of land are typically great cities to choose. Sometimes these cities have a much higher percentage of residential homes than commercial properties and can show great potential in purchasing commercial real estate or developing.  Going about this may involve you driving around the town to get a better idea of the town's surroundings. Sometimes even asking locals can prove to be helpful. But most of you will probably choose going to the city and obtaining public information about plans and future construction(s) to see what the city has planned for the future.

•2.       2. Target metro areas with good mid- to long term growth potential. Some examples are:

•·         Checking the demographics to see the cities diversified employment base for high growth potential

•·         Strong economic growth locally in the past five years or even a year if you choose

•·         No signs of overbuilding

Going to the city, talking to a Title Representative to get the demographics, and checking the census will be good ways of finding out information on the town you would like to invest in.  Whether it be developing or purchasing in commercial real estate.

The Next Step

After you complete steps 1 & 2 to determine which town you want to develop or purchase in. The next step would be to decide what type of commercial property will give you the best return on your hard earned dollars. In my previous article, "Investing in Commercial Real Estate" I used an example of my friend who invested in a 30 unit apartment complex in Tennessee.  The reason why he decided to purchase a 30 unit apartment complex was because he took the time to visit the city and discovered that a few shopping centers were going to be built in a 5 mile radius, and one of the locals in town told him about a military base that will soon be in town. In addition, he checked with a title rep to learn about the demographics and discovered that the median income is about $58,000 a year.

With the impending construction of shopping centers and no immediate plans on building homes he felt that purchasing the 30 unit apartment complex will give him the best return on his money.

You may also want to consider this scenario. If there are numerous amounts of homes and not enough commercial properties to accommodate the city, then perhaps purchasing a commercial property or developing one may be your best option. What to develop or buy will be entirely up to you. You may decide to build, or buy office space, shopping centers, or warehouse(s). But check with the city, talk to locals, get in contact with a title rep and drive around town to see what potential is there, because you don't want to invest in a restaurant if the town is saturated with restaurants, you probably don't want to develop or buy an apartment complex if the towns median income is above $100,000. Do your homework, weigh your options and then you can best decide on what you want to do from there.

Conclusion

If you are deciding to develop or purchase commercial real estate, now is the time to do it whether it be a good economy or a declining economy. There is always a need for businesses. I hope you view this article as helpful. I know there is an abundance of information regarding commercial real estate. They're some great books that talk about investing in commercial real estate. Visit our blog at http://www.hachefinancial.blogspot.com/ to comment on our blogs (or this one in particular). All comments are welcomed. Thank you for your time.

Once you determine the town/ are you want to buy commercial real estate in, and then your next step is to find a commercial building you feel that is ideal. After you've done that and you want to make an offer on that commercial property, and the seller accepts. Get excited, your day went just the way you wanted it to go, and you have already been pre-qualified for the commercial property you want to purchase. Rewind, back up, this is a perfectly realistic example, but before you begin your search for commercial real estate, it serves to your advantage to have an idea of some of the requirements when purchasing real estate.

• Commercial Real Estate is Not Residential Real Estate

What this means is your credit score is not the main picture here. In purchasing residential real estate you want your credit to be as high as it can be, because your credit determines your interest rate, your monthly mortgage payment, and the amount of money you put down. In commercial real estate, lenders are not worried about your credit. They are more worried about your financial credentials in the respect of how much money you can put down. This leads to our next tip.

• Banks Will Usually not Finance More Than %75 of the Appraised Value of the Property

Regardless of credit score, that is the general rule that lenders follow. Does this mean you have to come in with the %25? Not necessarily. A portion of it can come from you and the other portion can be done through seller financing (visit http://www.hachefinancial.com/articles.php?a_id=11 for more information on seller financing). For instance, let's say the bank approved you %75 of the appraised value, and you can put down %15. The bank will not have a problem if the seller is willing finance the %10. If the seller is willing to finance the entire %25, then you may have a deal. But I must point out that deals like that are rare.

• The Commercial Property Must Show Sufficient Debt-Repayment Ability

What lenders like to see is the ability that %75 of your gross income from your commercial property can pay the mortgage of your loan (Principle, Interest, Taxes, and Insurance). This information is determined by appraisers or you can ask the seller of the commercial property you wish to purchase.

Conclusion

I can go into lending guidelines and finance programs for commercial real estate, but that will be too lengthy and boring. For more information on commercial real estate you can e-mail us at support@hachefinancial.com or you can visit http://www.loanuniverse.com/realestate.html for some articles regarding commercial real estate. Realtors are definitely a good source of information regarding commercial real estate. We look forward to any questions and comments you may have. Thank you

You just received title to your recently purchased commercial property. Now you're going to have tenants leasing the space. Great! Now we will discuss management of your new commercial property.

The Lease

Negotiating your commercial property is obviously by far the most important aspect of your management. When a qualified tenant wants to lease your property, you want to realize he wants to rent the place as badly as you want to rent it to him. You need to be informed of what spaces are renting for and your vacancy rate. In addition be aware of the square footage you are leasing and your usable space when factoring the monthly rent. Have your attorney structure a lease agreement that will best suit you and your tenant. A website that I discovered that has a lease agreement that you can probably base off of is http://www.alllaw.com/forms/leases_and_tenancies/commercial_lease_agreement/. Or use an attorney. The amount of time your tenant stays in your property will only equal more profits to you (granted your tenant pays the rent). You may disagree with some of these tips, but you can offer some incentives that will be motivating to your tenant to rent the space longer. You can write in the lease agreement a 2% discount if the rent is paid 5 days before the due date. This obviously promotes an incentive to pay earlier and rent with you longer. You may even consider a month or 2 of free rent if the lease is long term. I am not saying to give away the store, but little incentives like that structured in your lease agreement may increase the length of stay, and your renters may b happier as a result.

Acoustics

Buildings with reduced sound levels are good qualities to have when managing a commercial property. It appeals to your renters and adds value to your property. Sound levels can be reduced if the building has been designed with adequate sound attenuation in the form of sound traps ductwork, vibration isolation on mechanical equipment, and the treatment of partitions above the ceiling line to isolate noise from one space to the adjacent space (Commercial Real Estate, Edited by Jack Corgan).

Signs

Address the sign issue as soon as possible. To your tenants, signage issues can be deal breakers or deal makers.

Cleaning

Cleaning specifications should be made clear and very definitive. The lease cleaning provision can only result in a better relationship with the tenant, allows you to provide the service, if you desire.

Power

The type of electrical system in your building is very important. It is useful to know how comparable buildings are charging for electricity. Is it a fix amount per square foot? Is it metered directly by the local utility? Or is it sub metered by you as the landlord? The most beneficial rate would be the average cost paid by the landlord, because this provides the benefit of the decreased cost of bulk purchasing.

Life Safety

More and more tenants are concerned with fire hazards in office buildings. All buildings, as a minimum, should meet the local code requirement. Exceeding these requirements proves only beneficial to you and your tenant. Developing an emergency evacuation plan doesn't hurt you either.

Exterior Appearance

Curb appeal is the basic requirement to attracting tenants, and paying attention to the landscape, exterior finishes, parking lot, lighting, and whatever else is exterior to your commercial property are critical.

Renovations

You may want to add in the agreement about renovations your tenants may want to implement during their term. Whether you as the landlord will contribute or not contribute. Renovations can add value to your property, and you may want to add that in their lease agreement.

Restrictive Covenant

You may want to the restrictive covenant clause depending on what type of commercial building you own. This will appeal to your tenants because it prevents competitors with similar businesses opening nearby.

Property Management Companies

If you decide to go this route in managing your commercial property, you can visit http://www.allpropertymanagement.com/  to determine which property management company will best suit your needs.

Conclusion

There is an abundant of books out there that talks more in detail about managing commercial real estate, if you would like to get more information. Feel free to e-mail us at support@hachefinancial.com or visit our blog http://www.hachefinancial.blogspot.com/ if you have any questions. Thank you.