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Purchase invoice example for non-profit organizations

hey everyone this is dr william clark your host of the dr william clark podcast glad to be back with you for another episode this is the podcast where we talk about all things fundraising and leadership and strategy in the world of nonprofit organizations i'm excited to be with you i want to talk as as best as i can in the time that we have about this topic of how to acquire a building for your non-profit this is certainly a hot topic for a lot of people particularly newbies who are trying to break into the space and trying to figure out how can they get their hands on a building uh we'll we'll talk about this but real quick before we jump into this i want to make sure i invite you to join the nonprofit fundraising strategy academy this is the academy that i've created just for you to talk about all things fundraising and to help you learn how to fundraise and raise major money for your nonprofit organization if that's what you're looking to do if that's what you're looking to learn certainly the academy that i offer uh available and make available is for you when you join the academy you get access to my live coaching sessions on a monthly basis with other students uh you get access to my 60 plus library of videos that i have available teaching you about the three secrets of fundraising you get also you also get access to tips tricks and tools that i use to fundraise every day if that's what you're looking for in an affordable package go ahead and visit me at nonprofitfundingstrategies.com again that's nonprofitfundingstrategies.com you can go ahead and click on the enroll button and it will take you into the portal and you'll be a part of the academy immediately again go ahead and visit nonprofitfundingstrategies.com now i want to talk about how to acquire a building for your nonprofit this is a hot topic for a lot of nonprofits particularly for new ones because i think people feel that uh if i have a non-profit i have to start the journey of getting property and i'm not sure where that mindset comes from you know um i really can't say i think people have all types of beliefs concepts around why they believe they need to have and own property uh uh outright uh let me just say before i walk through these strategies um there are better solutions uh to get yourself started like any other business you can start in your basement in an office in your home you can utilize community space to serve your clients and to do whatever you need to do for your customer base in your community so acquiring a property doesn't make you more official doesn't make you less official some may say for credit building purposes for legitimacy you might want to get a office which those things can be done affordably and much more cheaper than what i'm getting ready to share with you right now but just keep your options open um but this particular podcast i want to focus on the acquisition of property i will say that uh what i'm about to share with you comes from experience from the nonprofit side also comes from my experience as a non as a real estate investor rather as you guys know if you've been listening to the show for quite a while i've owned a real estate company we invested in real estate when i was living in philadelphia so a lot of this is a mixture of both and i want to get you started on this now there are two segments i want to cover uh here the first segment i'm going to cover is the acquisition strategies that exist the second part i'm going to cover uh is uh how do you finance this stuff so there are about eight things i want to say about acquiring the acquisition process of a building and i'm going to try to do this in a lot of time that we have for our podcast session here uh first thing you can do is get it for free you can find a donor who can who has a heart for your mission and your purpose and who wants to give you a property for free you can certainly uh do that that is a worthy strategy however the challenge with that is finding the donor so you got to find somebody that actually knows you that likes you that likes what you're working on and wants to give you something and who also has either a property already uh in their portfolio or has the resources uh to purchase that for you the next strategy number two is to go with a dollar purchase that's right one dollar purchases uh you you see this every so often in various cities and municipalities where cities are trying to get rid of properties for you guessed it one dollar uh it's pretty prominent right now in baltimore and i'm not in the baltimore market but it is widely known uh that it's there in other cities if you just do your research it doesn't always uh it's not always available so don't take my word for it as hey where the dollar properties like no uh it might not be happening uh in your city right now but being a lookout for dollar purchases from your city these are purchases where you can purchase a property for a dollar however you must and again look at your municipality but you must have a redevelopment plan a strategy a budget and a deadline so you gotta check out what is required to buy that property for a dollar third you can buy a property at market rate prices that means just like any other person you go on an open market you get a real estate uh agent who will represent your interests fine which what you're looking for you pay market rate prices um another way to acquire properties through owner held mortgage this is a popular thing that i do recommend you look at and that is uh a mechanism where a owner of a property depending on what you're buying is willing to sell you the property for a small down payment or reasonable down payment and that person will hold the mortgage you will pay them they become your bank if you don't know anything about that check that out search around what that means that is a really cool strategy that you can deploy the fifth strategy that you can use to acquire a building uh is through wholesale agreements uh again do your research wholesale agreements is when you buy property that is not listed that is off market from people who may not be uh real estate agents but they may uh have access to real estate property just because they run in circles with various investors uh having done that for a season i can tell you that stuff works however you got to know what you're doing when you do that sixth strategy i want to share with you uh the sixth way to acquire property for your non-profit is through tax liens these are properties that that owe taxes on them and the city wants to recruit their revenue and they will sell the property cheaper than the value but you gotta have cash uh this uh the seven strategy would be a short sale process buying a property that has money or debt owed to it and uh you then buy it from a bank who wants to get rid of the property at a discount again you gotta have access to capital do that and then uh the eighth strategy final strategy for this section is to go through the lease or lease purchase again as i open up this segment you can lease a property uh for a couple hundred bucks a month if you have in your area a place uh office space specifically for non-profits office parks you will find space cheaper than regular office regular offices for for-profit businesses search your community if you don't have that then look at small offices where small startups are renting space particularly co-working spaces you will find affordable prices there if you uh find a way to pay for it and afford it you'll be surprised but you can afford to get access to a private office also meeting space uh event space etc all a part of your rent including security uh photocopying services other stuff that just you know you can't afford on your own as a non-profit so look at that however at least a purchase uh is a strategy i'm gonna focus on this is somewhat similar to uh the owner held mortgage but you rent for a season or a period of time uh and then the portions of that rental fee you're paying goes towards down payment which then allows you to eventually purchase a property from the owner whether you're doing a a mortgage owner help mortgage etc and maybe i should have just oh well with the market rate purchase again which is number three you can buy that cash or get a mortgage all right so then uh the question is how do you finance the stuff okay so i got eight ways to finance this stuff if you are nonprofit uh you can finance it through contracts you can finance it through a fee contract or fee for service which means that if you have a contract to provide a service in your community for your state for your city etc there may be revenue attached to it that is uncovered unrestricted that means that if you have a profit from the contracts then you can use the profit from your contracts to actually purchase property so this is the designation that that we should focus on right when it comes to nonprofits yes you can make a profit you can't keep it you can't you they're no one own no one owns the nonprofit itself and so with that being said since no one owns the nonprofit itself uh you have to reinvest any profits this is a great way to reinvest it take the profits from a contract if you run a great business for the fiscal year and take the profits and purchase a property cash or use it as a down payment or whatever the case may be second strategy grants there are grants out there that are unrestricted uh unrestricted in nature there are capacity building grants these grants are few and far between if you're fortunate enough to grab these this could be a great strategy we got a grant a couple years ago just to do it was unrestricted whatever you need to do grant because we believe in the development of your company your non-profit and it was a couple hundred thousand dollars that could have been used to purchase property if we were doing it at that time so if you're able to come across grants like that unrestricted think strategically how you want to use those unrestricted dollars depending on the investment entrepreneurial mindset you may or may not have the mindset your board may or may not have this could be a cool way to acquire property and get on your way to becoming sustainable the green book right over my shoulder this is what i write about different ways to uh sustain your non-profit organization third way to purchase property uh through donations ask people to donate individual donors ask them to donate to this purpose to donate dollars to the acquisition of a property fourth way sponsorship dollars sponsorship dollars are going to come unrestricted more unrestricted than grants so when you get sponsorship dollars from people who are sponsoring your nonprofit not an event your nonprofit those dollars should be unrestricted when you negotiate those terms you take those unrestricted dollars and you use them to purchase a property again cash down payment whatever the case may be number five we talked about this in a previous segment but owner held mortgage this is a cool strategy i'm telling you this allows you to not worry about tapping into the credit line of of your nonprofit having to be approved or whatever case may be it's a negotiation between you and the person who owns the property if they are willing to hold the mortgage you might find this as a cheaper more affordable way to get property lower down payment lower interest rate agreeable terms if you get into any financial trouble a owner who is the bank him him or herself may be more uh uh open to having a conversation about payment challenges you may be having if you're going through a drought of revenue economic downturn etc they may be more feasible to deal with in a bank these relationships can be life to your nonprofit if you're going to use this to get a mortgage not a mortgage but get a property six six way to finance this traditional mortgage again qualify for a mortgage you get the mortgage for the property may have to put some money down depending on where uh where you live what type of bank you're dealing with etc uh it is what it is uh seven you can acquire property through partnerships partnerships where you can have a partner buy the property a partner may buy the property property sell it to you for a dollar and they get the tax write-off a partner may buy the property and lease it back to you at market rate value or cheaper or for free partnerships can be key people uh are looking for partnerships for all types of reasons and if you keep your eyes open if you know how to uh uh add partners to your portfolio and engage partners this can be a lifeline and then number eight line of credit if you have a line of credit uh for whatever reason you can use it to acquire property pay the line credit back and do it all over again this is in no way an exhaustive way to acquire property and to finance it but these are ways that i quickly came up with for this podcast and i think it it could be helpful for those of you who are looking to get started uh i encourage you to consider this thing before we uh shine off sign off on this episode and that is while everybody's so focused on a pr acquiring a property and purchasing a property very few people think about the sustainability of the property how do you keep the bills paid the lights on how do you keep the utilities going you got to afford to pay for the property capital upgrades the the heating system the cooling system the hot water heater all that other stuff of owning real estate now comes into play you are not acquiring a building just to provide programs for your community that's cool and all you when you acquire a building you are now becoming a real estate owner a operator a landlord what you're becoming a multi-business operator as a non-profit so please uh make sure you keep uh tabs on your sustainability plan it would make no sense for you to work this hard to acquire property than to lose it because you can't pay your bills pay your taxes uh keep your utilities uh on etc all right so these are things to consider if you want to talk about this further learn more about these strategies particularly around partnerships how to develop relationships that can yield the acquisition of a property i want you to join me at nonprofitfundingstrategies.com where we talk about the role of partnerships and how they can help you engage in building your non-profit again go to nonprofit funding strategies.com click on enroll we'll love to have you to be a part of the academy this is dr william clark for the dr william clark podcast we'll see you in the next episode peace everybody