Early Refinancing Might Work for You

The Newsletter

Does an ‘Early Refi’ Meet Your Long-Term Goals?
With interest rates at record lows, is it time to refinance your commercial mortgage even though it’s early days?

Forbes contributor Ely Razin notes, “Waiting for a loan to reach its maturity date without examining whether it might be open to early refinancing doesn’t make the loan better – it makes the lending opportunity more likely to pass by those lenders who wait too long.”

So if you want to take advantage of a lower rate, or refinance before a big balloon payment, or if you need money to build, perhaps an “early refi” is for you.

An early refi may mean you can benefit from opportunities available beyond your current lender – although refinancing with your current lender may make sense. How to decide? First, turn to your long-term business plan to decide whether to refinance early or wait until your loan matures.
In making your decision, you also may want to consider the following:

  • If the value of your property has changed, likely so has its loan-to-value; to qualify for refi, you may need additional equity.
  • Is your current lender prepared to lower your fees, or is a competitor anxious for your business and prepared to offer you a better deal?
  • If you have credit issues, a balloon payment refinance may be appealing, but you may be looking at a shorter term and another refinancing a few years down the road.

For many, early refi can work. But is it for you? Your final decision, if informed by your business plan, will answer that question.

The Decision-Making Process: Is It Algorithms vs. Humans?
Human Math

Too often, business people make poor decisions. Or so says Nobel economics laureate and psychologist Daniel Kahneman.

In a recent article in Knowledge@Wharton, Kahneman suggests: “We’re fundamentally overconfident in the sense that we jump to conclusions…so we misunderstand situations.” In other words, we’re driven by our emotions.

The cure? Algorithms, which can moderate our emotional responses by introducing “disciplined thinking.”

As explained by writer Kendra Cherry in verywell.com, “In mathematics, an algorithm is a defined set of step-by-step procedures that provides the correct answer to a particular problem…the same type of process can be followed to ensure finding the correct answer when solving a problem or making a decision.”

The use of algorithms may not be new, but algorithms have become something our society craves and needs, says Panos Parpas of Imperial College, London: “They’ve been used for decades – back to Alan Turing and the codebreakers, and beyond – but the current interest in them is due to the vast amounts of data now being generated and the need to process and understand it. They are now integrated into our lives.”

According to Michael C. Mankins and Lori Sherer in Harvard Business Review, “The use of analytics can hugely improve the quality of your decisions and can increase decision process efficiency by as much as 25%.”

Fortunately, the human factor is likely to remain key. Someone has to identify the problem and ask the right questions. Otherwise it’s garbage in, garbage out. So…people 1; algorithms 1. It’s a win-win.

Harness the ‘Latent Power of Connection’ to Succeed

As a society we face a dramatically changing – and frequently disturbing – world, and many say we lack the understanding (or the smarts, or the vision) to handle the economic and political crises that shake our world daily.

Joshua Cooper Ramo disagrees. It’s the connections between these crises we’re missing.

In a recent LinkedIn article, author and consultant Ramo introduces us to his newest book, The Seventh Sense. Here he examines these continuous crises and explains how they’re caused by the same underlying dynamics.

Ramo sees the world through interlinkages. While invisible to most of us, these interlinks can be used to explain everything from explosive technological changes to viral videos to far-off coups d’état. Eventually, we will learn to adapt to the reality of these systemic connections, and be able to deal intelligently with them.

A network, according to Ramo, is any collection of linked nodes. The most obvious network is, of course, the Internet, but there are also expansive and powerful networks of trade, finance, DNA, knowledge, and people. The ability to recognize the connections that are at play in any given context is what enables one to disseminate a new idea, a brand, a trend, or even a revolution.

To leverage these latent connections, ask yourself: “What connections can I find that will help me grow my business, solve business problems, or confront looming challenges?” Ultimately, it will be these connections and our ability to perceive, access, and utilize connected systems that will determine how powerful and influential we are.

IAQ Poses Challenges in Multiunit Buildings
We North Americans now spend more than 80% of our time indoors. So the quality of the air we breathe is important.

In the past few years, indoor air quality (IAQ) has taken center stage as more and more people suffer from allergies, respiratory problems, and a host of other illnesses resulting from poor air quality – outdoors and in.

Lung.org  notes that humans take an average of 21,600 breaths a day. And for those with respiratory problems, those breaths can be agonizing. This month some North Americans are acknowledging the issues during October’s National Home Indoor Air Quality Action and Awareness Month, but just about every jurisdiction has some day, week, or month that recognizes the importance of IAQ.

While IAQ should be a concern for every building owner, there are unique air quality issues associated with multiunit buildings that impact these landlords.

According to the U.S. Environmental Protection Agency (EPA), an estimated 80 million people live in multifamily buildings, including attached townhomes and low-, mid-, and high-rise apartments and condos.

Pollutants in these multiunit buildings can move through common areas and from unit to unit, creating a much wider problem than in a single detached dwelling. Usually the issue belongs to the owner (or renter), who has little control over what happens in other units or the building as a whole.

IAQ problems may arise from a poor indoor environment, including humidity, poor air circulation, and ventilation system issues, and from contaminants such as cleaning chemicals, dust, mold, bacteria, and gases and vapors.

Often the pollutants are introduced as a result of insufficient outdoor air intake and other malfunctions of the HVAC systems.

Tobacco smoke also poses a health issue as it circulates through the building’s system. Radon gas remains a serious problem, as does carbon monoxide.

Building-related illnesses (BRIs), which affect certain people in a certain time period and a certain building, include Legionnaires Disease, caused by a bacteria that contaminates and spreads through the building’s air-conditioning system. Many people have died from this BRI since it first occurred in 1976.

Regulations: In fact, the regulations surrounding IAQ boil down to guidelines to assist the industry, primarily in cases where whole buildings are being upgraded.

However, the EPA recently developed Indoor Air Quality Guidelines for Multifamily Building Upgrades. The document includes ways to identify twenty-four priority IAQ issues that may arise during upgrades, and provides a list of minimum actions to take to correct the problems.

Otherwise, across North America, IAQ is included in building code standards. The current North American standard is the American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) Standard 62.1-2010 – Ventilation for Acceptable Indoor Air Quality.

It’s worth noting that the above guidelines have been introduced very recently. There are hundreds of groups concerned about IAQ, from health organizations to local citizen groups, and their concerns are not falling on deaf ears. If you’re currently retrofitting or making energy upgrades, you may want to comply now.

SA Realty Watch Group
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Worth Reading
The Impoverishment of Attention
By Shane Parrish
Farnam Street blog

In his book Focus: The Hidden Driver of Excellence, Daniel Goleman laments the fact that many people exist in a constant state of fractional attention because the onslaught of incoming data diminishes their focus. In his discussion of Goleman’s theory, Parrish highlights the need for accurate focus and reflective thinking, something that also concerned ancient philosophers.

Giving Feedback to an Overly Sensitive Worker
By Staff

Business Management Daily

It can be difficult to give constructive feedback to overly sensitive employees. No one likes to correct a worker who gets angry. It helps to act promptly; be direct, clear, and specific about your expectations; focus on behavior, not personality; and listen. And remember, most overly sensitive workers have other more positive qualities.

Is This the Most Perfect Method for Staying Organized?
By Anna Hensel

Inc. com

Hensel is a believer. It seems Ryder Carroll, who has suffered from ADD, designed the Bullet Journal while in college as a way to take notes more mindfully and systematically. His method employs various symbols (dots, circles, lines, etc.), and Carroll calls his note-taking system a work in progress. Some of us will be happy just to have a system.

This Month: How to Be a Great Listener
“Don’t speak. Nod frequently. Maintain eye contact. Throw in an “uh-huh” or “mmm…” every so often. Is that it? If we do these things, are we good listeners? These may play a part, but great listening requires more. Find out how to be a great listener below.

New research shows great listeners are trampolines, not sponges. Get your bounce on here:
What Great Listeners Actually Do

Great listeners possess special traits, such as:
9 Things Good Listeners Do Differently

Better listening means better business. Understanding your colleagues can make the difference that leads to success. Find out how:
Tips for Being a Highly Effective Listener

Researchers found we remember only half of what we hear. Increase this at:
Be A Better Listener Immediately

Effective leaders are great listeners. Take this road to intentional listening and become a leader:
Are You An Intentional Listener?

This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter.
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