Are You Performance Driven?

By: Bob Devitz

Legendary Golf Management Warning: Proceed with Caution. The following information on performance driven compensation is hazardous to anyone who does not want to be held accountable!

Are you Performance Driven?

I am amazed at the number of clubs and resorts I speak with who fall far short of creating expectations and accountabilities in their businesses for their key management personnel. Business is about producing a ?bottom line? in accordance with the experience your members and guests want and are willing to pay for. And yet when I ask about specific goals and staff compensation, I find that in almost all cases, the staff is operating under what I term an ?entitlement system? for compensation.

An ?Entitlement System? for Compensation

So, what is an ?entitlement system?? Well it’s basically a system that pays for doing little more than coming to work and getting through the day It has nothing to do with the actual quantitative or qualitative performance a key staff person is able to produce, or not. Key club personnel such as the general manager and department managers get paid a salary irrespective of the business outcomes. Whether the performance is outstanding or horrific, the pay is the same.

An Alternative: Performance Driven Compensation

The alternative is a ?pay for performance? compensation plan! And once a sound ?pay for performance? compensation plan is put in place, an amazing transformation occurs! The transformation is sudden and impactful! It creates a buzz in the club. It gets everyone’s attention. And it is not without pain. It initially scares the heck out of the staff.

Suddenly, pay is dependent upon producing results, not just showing up for work. Suddenly, spending money does matter. Suddenly, that lead for an outing, a new member, or a private event takes on new importance. Suddenly the staff is now the owner’s partner in the success or failure of a club or resort instead of just a passive bystander.

Suddenly the key staff has a stake in the business outcomes and begins thinking and acting like an owner, like someone whose personal financial situation is dependent upon the results of the business, because it is!

So, what does Performance Driven Compensation look like?

Performance driven compensation looks like exactly what it sounds like! It involves placing a significant portion of every general manager’s, sales person’s and department manager’s compensation on the quantitative and/or qualitative results of the business.

For sales positions such as membership directors, private event directors, and outing salespersons, 60% to 70% of the total compensation potential should be based on sales results relative to a predetermined sales plan. What amazes me most is that at so many clubs/resorts, sales personnel are paid salary only. They have no sales goals and no commission component. Salary only for a sales position, huh?

For positions such as General Manager, Food and Beverage Manager, Chef, Director of Golf, Head Golf Professional, Golf Course Superintendent, Tennis Director, Facility Maintenance Director, Golf Course Superintendent, and Club Accountants, 25% to 30% of their total compensation potential should be based on performance. A portion of the performance based compensation should be based on specific departmental numbers, a portion on qualitative plans for improvements in specific departments, and a portion on the financial results for the overall club or resort.

What are other KEY COMPONENTS of a performance driven compensation plan?

- A financial plan that has is basis in the realities of the business and is not some ?pie in the sky?, unattainable goal.

- A quarterly payout.

- A sales plan for every revenue department.

- Formal quarterly reviews.

- Minimum hurdles usually beginning at achievement of 95% of plan to get any bonus (does not apply to sales people).

- Overachievement pay available when financial results are exceeded.

- Performance review modifiers for payout.

An Example, albeit an ill fated one!

And the plans have to make sense. For example, I spoke with the General Manager of a course operated by a management company who believed his club had ?performance driven compensation plans?. In chatting further with the General Manager, he explained that plans were in place for most departments and were being developed for others. He offered an example as a key department manager having $10,000 of bonus potential based on the revenues of his department for the year. Ok so far.

Then it went awry. The club is having an off year and the total revenue budget is $1 million. The General Manager said that they would be lucky to get to $800,000. I naturally assumed that missing the annual goal by 20% and by more than $200,000 would result in ?no bonus?. But no! I was told that he would receive 80% of his bonus if the club only achieved 80% of its goal.

WHAT? The club is missing plan by 20% and by $200,000 in revenues and a bonus of $8,000 on a total potential of $10,000 will be paid. When I pointed this out to the General Manager, he suddenly was a lot less proud of this performance based plan. The reality is that it’s not performance based at all, just another iteration of entitlement pay!

And I can cite countless more silly examples!

Three Types of Employees

There are three types of employees. Those who MAKE things happen, those who WATCH things happen, and those who WONDER what happened? And if you implement a ?performance driven compensation plan ? it will quickly become apparent who buys in and is ready for a challenge and ready to have their performance measured and who does not.

The Performance MAKERS will display immediate interest, begin pulling reports, become excited about having a specific goal that will be measured, and begin looking for better ways to do business.

The uninvolved WATCHERS will complain about how it’s not fair, spend lots of time trying to explain why it’s not fair, and quickly disengage.

And the clueless WONDERERS, well, they will just fade away.

A performance driven compensation system will quickly eliminate the WATCHERS and WONDERERS and you will within a short period of time have a solid club/resort team of Performance MAKERS!

So, what will it be at your Club or Resort?

So, what does compensation look like at your club, course, or resort? As an Owner, Board Member, or General Manager are you supporting your staff through their weekly pay just for showing up, much like an allowance for a dependent? Or, is your compensation designed to drive performance, engage all of your key personnel, and have them as a partner in your success?

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_11210.shtml

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Steps Involved in Refinancing a Home Mortgage

By: Allan Young

Over the past several years, many people have become involved with home mortgages that carry high rates and difficult terms. Now that interest rates and home prices have fallen, it makes sense to explore the option of refinancing a home mortgage. If you are considering refinancing your mortgage, the steps discussed below are crucial to take when refinancing your home mortgage.

Decide if refinancing your mortgage is right for you.

While there are many perks that make refinancing your home mortgage attractive, there are also costs associated with refinancing. Before you decide whether or not to refinance, it is very important to understand what it will cost you in fees, evaluations, and penalties, for early mortgage repayment. There is a standard rule of thumb for deciding whether a refinance is worth considering: if you can refinance into a new mortgage that is at least one full percentage point lower than your current mortgage rate, and are planning to remain in your house for at least two years, it is most likely worth it to refinance your home mortgage. Also, most banks will require that you have at least ten percent equity in your house before they will even consider refinancing your mortgage.

Calculate how much you will save by refinancing your mortgage.

The main reasons for refinancing a mortgage are to lower your monthly mortgage payment, or to reduce the overall amount you will end up paying for your house and loan. Before you can decide if a refinance makes sense for you, you will need to figure out how much you will actually save by refinancing to a lower rate, or a longer term. Depending on your ultimate goal, it may make sense for you to pay more in the long run by refinancing to a longer term in order to get lower monthly payments. It might also be beneficial to pay higher monthly payments in order to pay off your mortgage sooner, and pay less over the full term of your loan.

Shop around for the best mortgage rates on a refinance.

As with any other loan, not all refinance mortgages are equal. Check with your current mortgage holder and shop around online before settling. There are websites where you can compare mortgages and loans side by side, or request mortgage refinance quotes from multiple lenders. Once you have several quotes, you can sit down to compare the costs and figure out if refinancing your mortgage makes sense and if so, which loan makes the most sense for you.

Figure out how much it will cost to refinance your mortgage.

Refinancing your mortgage will involve many of the same costs as getting a mortgage in the first place. You will probably need to pay for an appraisal, as well as typical closing fees. In addition, there may be a pre-payment penalty on your current mortgage that will add to the cost of refinancing.

Fill out a prequalification application.

Depending on the bank or lender, you may have to fill out a prequalification application in order to get a quote for a refinance on your current mortgage. In fact, you will find most of the refinance process to be familiar, since it is very similar to the original mortgage process.

Complete a mortgage application.

After you fill out a prequalification application, a representative of the bank or financial institution will contact you to discuss loan options. The loan officer will be able to give you more details about the costs and the process you can expect. Usually at this point, the mortgage company will lock in the interest rate on your mortgage refinance to protect it against any fluctuations in the market interest rates.

Get an updated appraisal.

Most banks or financial institutions will require you to get a new appraisal of your property. If you are refinancing your mortgage with your current bank, the bank may be willing to forego the appraisal, which can save you both money and time.

Review the loan documents.

After the appraisal is accepted, and the loan officer grants final approval, you will receive a set of loan documents to review. Look them over carefully to make sure that the terms of the loan are what you agreed to. In most cases, you will actually sign the loan documents in the presence of witnesses, usually at the bank or financial institution.

Other possible requirements for refinancing a home mortgage.

Be prepared for typical loan closing fees. These fees might include a loan application fee, loan origination fees, closing costs, private mortgage insurance, and miscellaneous costs including copying and administrative costs.

Making Home Affordable Refinance Program

If you are looking to refinance your mortgage because you are in danger of defaulting on your mortgage, you may be eligible for assistance through the Making Home Affordable Refinance Program, part of the Economic Stimulus Recovery Bill. Check with your bank or with your local government offices to find out if you qualify for assistance through this program.

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_11161.shtml

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Countrywide Home Loan Modification - Should You be Concerned?

By: Lindsy Emery

In July, 2008, Bank of America bought Countrywide Bank, a major mortgage lender. Homeowners whose mortgages were held by Countrywide heard of its plan to offer refinancing or loan modifications to help homeowners struggling to pay their monthly mortgage. These homeowners need more information about the process in order to learn what it will mean to them and who qualifies.

Countrywide has a bad reputation as a mortgage lender. In 2009 the State Attorney General sued Countrywide for predatory lending practices. A goggle search will find many negative postings from customers who were not happy. One of the top complaints stemmed from the fact that different customer service representatives seemed to have different information and much of what the customers were told were contradictory. This lack of communication meant that homeowners were charged extra money and time was wasted.

After the lawsuit, Countrywide issued a press release, announcing a new plan to help troubled homeowners quickly. For loan modifications, the goal was to reduce monthly payments so they would be 34% of the homeowner’s monthly income, making the mortgage bill more reasonable. These modified loans included a step-rate interest payment over time. In order to qualify for this program, the homeowner has to be living in the house on which the mortgage is held.

There are many ways Countrywide plans to modify these loans. For FHA loans, there is HOPE for Homeowners, a refinancing plan that lets people without very much home equity refinance their home through an equity-sharing program. If the homeowner does refinance through HOPE and later sells the home, a sliding scale is applied to determine how much of the home’s equity will be given to FHA after the sale occurs. There are other options regarding loan modifications such as interest rate reductions along with principal reductions, which would restore equity.

Despite Countrywide’s sketchy past, if you have a mortgage with Countrywide the best thing you can do now is move on. Seek a loan modification if you feel your payments are too high in comparison to your monthly income and don’t wait for someone to approach you, take charge. Bank of America is working to change the image Countrywide has acquired and their new plans of loan modification have been put into place since the lawsuit. Now Countrywide regularly reviews mortgages and sends letters to homeowners who are 60 days behind in their payments. In this letter they outline their new loan modification policy.

If you have concerns about your mortgage loan adjustment from Countrywide you can find out about your eligibility and the process to apply for a loan modification.

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_11203.shtml

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A Comparison of the Cost of Foreclosure Verses Loan Modification

By: Lindsy Emery

We have all heard talk about the troubled economy, but the fact that people are starting to consider what might be better, a foreclosure or a loan modification, highlights how bad it really is. For some, this is a very difficult time. A comparison of the costs of both foreclosure and loan modification has been studied by those in financial circles, but politicians and by real estate professionals. What needs to be understood is that the two are very different and cannot accurately be compared.

Before stating what one is better or worse than the other, the terms need to be defined. A loan modification refers to changing existing terms of a loan agreement. In short, when you modify a loan you change the amount you pay each month, hopefully reducing it from what you had originally agreed on.

A foreclosure occurs when you cannot longer meet your monthly obligation to the lender. In this case, after missing several payments, the lender can take control of your property and sell it. They use the money they get from the sale of the property to cover what is outstanding on the loan. The homeowner gets nothing and loses the property.

An agent will help you investigate both these options and will consider your case and work with you to find out what the best alternative is in your circumstances. If you own a home and are going through a rough patch and the agent thinks that even with a loan modification you will still have trouble, a foreclosure might be the only option. The problem with this plan is that you no longer have a place to live. Foreclosure and home loan modification are both options with different pros and cons. When you try to decide what one is right for you, you are simply choosing the lesser of two evils.

If you are trying to decide between foreclosure and loan modification, you need to learn as much as you can about both. In this article, we will discuss what you should consider when you are making this decision both for yourself and for your family.

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_11178.shtml

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How to Wholesale a Hot Smoking Deal for 5 Figure Profits

By: Karen Roberts

5 Figure Assignment Fees may be hard for some people to believe in today?s Real Estate Market. Believe it or not, they are still out there for the active, persistent and methodical real estate investors, even the first-timers!

Wholesaling

Wholesaling is the art of finding and assigning properties. It can be so appealing to new investors because there is very little cash required to support these types of deals and credit is not an issue. A new investor requires only a small amount of cash to cover earnest money deposits, advertising, etc.things like this.

Discover your mission, vision, or purpose in life.

Spend some time envisioning the type of lifestyle that fits your family and personality traits. Then begin to realistically set your goals based upon the vision.

Remember the basics about goals ? they should be SMART GOALS.

S-pecific

M-easurable

A-ttainable

R- ealistic

T-imely

Aim for what really matters to you. Discover your mission/vision/purpose. and teach yourself how to set and persist to achieve your goals. To manage time effectively track your tasks consistently, so that you don?t waste time on non income producing activities. Visualize and focus on your goals daily to ensure that your actions reflect that which pertains to your goals.

What tools do you need?

The basic tools that you will need as a new wholesale investor are these:

* Cell phone - (preferably a PDA) with unlimited minutes, you?ll need them! This will help you to organize your tasks, records, phone numbers and synchronize with your computer.

* Computer - researching data comps and for marketing your wholesale deals

* Printer - print out contracts, contracts and any documents

* Camera - this is an absolute must have for creating your e-flyers to mail our to your database to sell your deal

* Contracts / Agreements

* Fax Machine

* Filing Cabinet ? you?ll need this too.

As your business evolves, you?ll reach a point where you will find other tools and gadgets that increase your productivity and your profits.

How to find deals:

There are many places to you can locate deals and here is a list a few of them:

* Vacant Houses

* Title Companies

* Home Inspectors

* REIA Clubs

* FSBO?s

* Bankruptcy Attorneys

* Homeowners Associations

* Burned out Landlords

* Bail Bondsmen

* Code Enforcers

* Hard Money Lenders

* Meter Readers

* Waste Management

* Divorce Attorneys

* Probate/Trustees

* Tax Offices

* Garage Sales

* Estate Sales

** Every time you go for a ride, take a different route to get to know your neighborhood, the properties, comps, vacants and utility workers.

Once you?ve made contact with a truly motivated seller- you?ll make them an offer on that property based on the comps, repairs and your desired profit.

Quick Calculation of the Maximum Acceptable Offer: (MAO)

MAO = (ARV x .65) ? RC ? CC ? AF

ARV = After Repair Value

RC = Repair Cost

CC = Carrying Costs

AF = Assignment Fee

Assigning The Contract

The most important thing to do here?.in the money step is to be very clear that you?ve contracted to purchase the property as ?your name?.and/or assigns?: By placing and/or assigns after your name, you?ve ensured your ability to assign the deal to an end buyer. Although a contract is usually assignable unless otherwise stated, I would hate for you to fall down on the money step by leaving it to happenstance. Once you have an executed purchase agreement with the motivated seller that contacted you and you?ve negotiated a hot, smoking deal with your and/or assigns on that top line?you are ready to find your buyer.

Note: In my contracts, ?and / or assigns? is a part of the agreement along with the following clause.

Buyer shall receive a key within 48 hours and be granted access to the property to allow partners and contractors to evaluate it as needed. If the seller is still living in the house, I request access on pre-arranged days and times. When they won?t be there and this allows me to get my investors in to see the property.

How to help your buyers see the value in your deal

I try to make it as easy as possible for my buyers to access, evaluate and purchase my wholesale deal by doing the following. By having my contractor to come out and submit an estimate on the needed repairs (on his professional letterhead) can save my buyer/investor a great deal of time and guesswork and I also ask my real estate agent for some accurate comps on the subject property. Even though I encourage every buyer/investor to pull their own comps, perform their own due diligence, I?ve found that by doing these things, they are steps that aid in the process of assigning the deal.

So at this point, you?re so close to that meeting with your bank teller right? ?hang on!

At this stage, you have the property under contract, you?ve got your estimate(s) for the repairs, comparables, photos, and you?ve got access to the property and your blank assignment of contact in your hot little hands. You?ve done a lot and you?re close.

How to Find a Buyer for your Deal

During this point, time is certainly of the essence and you?ve got to get your e-flyer made and sent out to your database, your craigslist ads, your for-sale-by-owner posts, directional arrows and a hard copy to bring to your local real estate investor club.

In my experience, they are many, many ?wanna-be? investors that read book after book, attend seminars and invest within the confines of their minds. My advice to my students is to weed out the tire kickers from the decision makers, early on before they have a deal. Create a performing database. It doesn?t have to include many, many names?. just the ones that know a hot, smoking deal when they see one and that will perform when the times comes to do so.

What day is it? Now it?s payday!

Your end buyer / investor will be exchanging a signed assignment of contract with you for a fee. They are paying for the right to step into your place and fulfill the obligations that you and the seller have set forth.

Collect a deposit from your buyer as you hand over the purchase agreement and obtain a signed assignment of contract . This will help you to separate the decisive, action taking investors from those that have a case of paralysis of analysis. If your buyer is serious about moving forward, they will have the wherewithal to hand over a deposit in good faith thereof.

Since it?s your deal, you would be using your title company who is most knowledgeable and skilled in the art of wholesaling properties and the manner in which you operate your business. You will provide your title agent with instructions about the remaining funds that will be released to you upon settlement. If your title company is not able to release those funds to you at that time, it?ll be necessary to execute an addendum with your buyer.

An addendum attesting to the fact that you will be both be at the closing and the buyer ( your assignor) must pay you in the lobby immediately following the closing, along with a Notarized Memorandum of Agreement would help to protect your interest.

Assignment fees can be very lucrative in certain markets. On my very first wholesale deal- the assignment fee was $7,000 and I had never done it before?.so not bad right? My third wholesale deal allowed for a $40,000 fee because it was a hot, smoking deal. The buyer, a contractor was thrilled to get that property so that he could rehab it and make his profit.

Hot, Smoking deals are out there?.if you?re not paying attention, you?ll bump right in to one of them!

So, with that- see your vision, steady yourself, prepare with vigor and head in that direction with renewed energy, confidence and persistence?and remember to enjoy the journey.

Karen Roberts

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_11169.shtml

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