cebd1@sbcglobal.net asked:
I am the Founder/ Executive Director of an area Non-Profit organization. We are interested in purchasing income property and we have our eye on one in particular. Would it be better to attempt to acquire the property through the agency or through my personal name?
Gregory
I am the Founder/ Executive Director of an area Non-Profit organization. We are interested in purchasing income property and we have our eye on one in particular. Would it be better to attempt to acquire the property through the agency or through my personal name?
Gregory
{ 2 comments… read them below or add one }
It would depend. Do your non-profit have any financial or credit history,money in the bank, can prove it’s ablity to earn money. If you can answer these question yes then you might have a chance of getting a lender to finance the property in the non-profit’s name. I think even if you find a lender who will be willing to finance the property in the non-profit you will still be responsible for it personally and you will not get a non-recourse loan.
If you can not purchase the property through the non-profit, go ahead and get it financed personally in your name. After that transfer the property at the county records to the non-profit, please use a title insurance company when you do this and not just get a quit claim deed and record the change of title. This will save you lots of problems when and if you decide to sell or refinance the property. Also from that point on pay the mortgage with checks from the non-profit. You will not be able to transfer the loan at this time to the name of the non-profit.
With doing this you will now be putting the non-profit into a position of net worth and paying the loan as well. Also you will have proof that the non-profit is paying the debt.
with the cancelled checks.
You will also want to get a credit report for your non-profit if you have not done so. The credit reporting agency for corportations is called Brad and Dunstreet. You must have your non-profit listed in the telephone book with it’s own seperate telephone number. Have someone call Brad and Dunstreet and inquire about your non-profit,this will trigger Dun and Bradstreet to look your number up in the telephone book. Someone from Dun and Bradstreet will call and inquire about your non-profit. Tell them as much about your non-profit as possible such as financial, the number of years you have been in business, the number of employees etc. This will get your credit report going and now in the future you can point to your Dun and Bradstreet as proof that you pay your debts on time.
I hope this has been of some help to you, good luck.
“FIGHT ON”
You tread very, very dangerous waters. Step 1: HIRE A LAWYER. Your potential for a conflict of interest is huge. You should have a good lawyer, a competent board, meticulous disclosure and documentation, and clear arms-length distance in all transactions.
You should ONLY consider buying it personally if you are doing so as a wealthy benefactor. If you intend to relet space to the non-profit of plan to resell to the non-profit in the future you face a conflict of interest.
Also remember that non-profit assets are held “in the public good.” Once donated, they’re gone to you. You can not put money or assets into them and then take them back out. Playing the ED and an investor/lender role may be very hard to play without 1) tripping conflict of interest or 2) losing control of all of your money. Good luck!
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