"Now you have location selected you can now set origin/pivot location there are two ways to do this

1. On left side look for set Origin
click on it and look for Origin to 3D cursor
This will now set Origin/Pivot location to there area you selected in step one

2. use short cut Shift+Ctrl+Alt+C
unless you have changed the shortcut keys this also works

You can now move on to setting pivot rotation

notes:
Yes i spelt pivot wrong"