Has Anyone Purchased Real Estate From a Non-Profit Organization?

Question

Hi All. Has anyone purchased real estate from a non profit organization?

How difficult was it? Did the house have to be appraised? I'm assuming the board had to agree to the sale?

Juan Serrano · Answer

@Don Konipol

Hi Don, I'm looking into buying a large building  but I have to  form a non-profit organization.  My question is how do I get the monthly revenue (profit) that's left over after paying all the overhead?  Is it worth it?

Steve Babiak · Answer

It's not MLS access, it's access to properties prior to listing on MLS.  Many HUD properties are offered this way.

Ibrahim Hughes · Answer

Wow. Great idea!  Any idea as to how and why a NP would be able to get access to the MLS?

Kevin Kirkman · Answer

there are non profit organizations that get properties for free or at pennies on the dollar.  They aren't in the business of rehabbing homes so they give them to me and I make a donation once property is sold.  They also have the access to properties before they hit the mls.  So I can purchase them before the general public can

Ibrahim Hughes · Answer

Thanks everyone. To give you a little more background as to what I have planned, I'm looking at a boarded multifamily that has been basically abandoned by a very small non-profit. I think they initially set up their organization as a church and are apparently labeled a non profit org. by the state.

I have tracked down the Chairman of what appears to be their 3 member board. He's resisting doing anything with the property so I'm trying to lean on him a little and hopefully convince him that the process to dispose of the property is a simple one.  So again your comments are appreciated and any additional ones are welcomed.

K Kirkman - your comments on partnering with non-profits piques my interest as I am a volunteer for a youth based one in our state's largest city: Newark, NJ.  I plan on doing some real estate investing with and for them in the very near future.  Can you elaborate on how you partner with them? I'm going to send you a colleague request so PM me if you'd like.  Thanks!

Bill Gulley · Answer

Many times on both sides.

Yes, the board needs to bless the transaction, or larger ones may give specific authority to a committee or even one executive director, depends on the scope of business and the the significance of the transaction to the organization.

With smaller organizations, like local affiliate off Habitat for Humanity, you find citizen members who may not have a real estate background but one or two who do and the board will generally be in a go along mode relying one such key members. Many are simply rubber stamp voters.

Find the leader of the pack and you should have no problems.

As Don points out, fed dollars will have strings attached, mostly with the property remaing in the low mod rental market for a certain period. You may be able to buy, but you may not be qualified to lease and manage, Section 42 tax credits for example, so you may buy and leave management with the non-profit qualified for the project.

CDBG funds can also pose a problem if the buyer is not in political favor to assume loans. Usually you just pay these off and continue.

Might search for a thread about non-profits. Several points already discussed on BP.  :)

Kevin Kirkman · Answer

I have partnered with several non profit organizations.  I purchase cash and therfore no appraisal is needed

Don Konipol · Answer

Varies tremendously with each organization different.  Those that accept Federal funds have the most difficult and time consuming procedures.