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2018 Housing Colorado NOW

Problem Solving and Negotiating Skills. 2018 Housing Colorado NOW. Today’s Learning Objectives. How to recognize financial and non-financial aspects of a problem How to negotiate more effectively with other deal participants

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2018 Housing Colorado NOW

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  1. Problem Solving and Negotiating Skills 2018 Housing Colorado NOW

  2. Today’s Learning Objectives How to recognize financial and non-financial aspects of a problem How to negotiate more effectively with other deal participants How to create options and alternatives that lead to win-win solutions

  3. The Art of Problem Solving, Deal Structuring and Negotiation • Successful deal structuring is not just numbers. Deals are made by people. People are motivated by factors other than money. • Deal structuring has two equal parts: science and art • Financial factors (science) • Non-financial factors (art) • Both financial and non-financial factors need to be successfully addressed for a deal to go forward

  4. The Art of Problem Solving, Deal Structuring and Negotiation • Uses the information generated by financial analysis, plus an understanding of the needs of the deal participants, to negotiate a deal structure satisfactory to all the participants • Understand the needs of the deal participants • Use your financial analysis techniques • Set aside the “personalities” of participants • Negotiate a deal structure that is satisfactory to all of the participants

  5. The Problem Solving Process Step 1: Define the problem(s) Step 2: Identify the outcomes you’re trying to achieve - not “how to get there” Step 3: Identify existing and potential players Step 4: Evaluate the players Step 5: Formulate possible solutions Step 6: Build consensus around a solution Step 7: Implement

  6. The Problem Solving Process (cont.) • Step 1: Define the problem(s) • Financial analysis – the key to identifying and understanding financial issues • Non-financial considerations – other needs that must be met • Step 2: Define the state of being fixed • What specific things must be accomplished in order for you to say that you’ve solved the problem? • Do not talk about “how” to solve it, just what “SOLVED” looks like

  7. The Problem Solving Process (cont.) • Step 3: Identify existing and potential players & evaluate them • Who can help achieve your goal? Who’s already involved? Who might be willing to become involved? • Assess level of motivation. How much does each player want to get to a solution? • Assess each player’s negotiating strength. How easy is for them to walk away? The easier it is for a player to simply walk away, the greater their negotiating strength. • Assess each player’s ability to contribute to the solution. What do they bring to the table?

  8. The Problem Solving Process (cont.) • Step 4: Identify which players are central to a solution • There are lots of possible players. You have to identify which ones are likely to be the key players. • Determine what they need in order to be part of the solution. What to you need to give them in order to ask them for something? Who |Motivation | Negotiating Strength | Ability to Help

  9. The Problem Solving Process (cont.) • Step 5: Formulate possible solutions as a group • Kick around ideas, brainstorm • Test ideas for viability (are players’ needs met?) • Propose solutions that solve the problem and seem acceptable to all players • Step 6: Build consensus around one solution • Get all essential participants to “buy in.” May take time - build trust, vesting. • Step 7: Implement solution • Put agreed-to solution in writing

  10. The Problem Solving Process (cont.) • Negotiating • Affordable housing is a relationship business • Goal is not to “win” but to find a solution that • is acceptable to all players • Realistic commitments • allows a continuing relationship • Negotiating is a way of finding common ground • Separates the people from the problem • Focuses on interest, not position • Invents options for mutual gain

  11. Why Do We Negotiate? • Provides a Framework to deal with and resolve conflict • The sources of conflict are: • Resources • Needs • Values/Interests • Good negotiation skills assist you in resolving conflicts so a project can go forward • Not whether you want to do a deal, but finding the correct deal – obtainable and practical • How to make it happen given the political and environmental constraints

  12. The Most Valuable Skills for Any Housing Professional • Recognize and wade through all the non-financial issues to let all participants go forward • Create options and alternatives that lead to win-win solutions • Ability to think like the parties with whom you are negotiating – permanent lender, construction lender, investor, public agency developer… • Understand their concerns • Speak their language • Evaluate their Position • Find the common ground…

  13. Contact Us • Training • Technical Assistance • Development Services • Syndication Karen Garritson 303-475-7986 kgarritson@ndconline.org Erin O’Neill 303-665-7068 (o) 720-985-7068 eoneill@ndconline.org

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