Grants Are Not Transactions

For the last few years I’ve worked with several real estate investors to help them get grants.  Throughout this process, I’ve sometimes found it frustrating working with real estate investors because I didn’t understand why they found grants so complicated.  Recently I was talking with a colleague Kevin, who has a lot of experience in the real estate world and he said to me “Real estate investors look at everything as a transaction.”  I got it! It made perfect sense to me.  Most real estate investors  look at everything as a transaction or a deal, which makes sense because that’s what real estate investors do – they do deals.

The complicating factor, however, is that grants are not transactions. Grants are designed to make an impact on a problem, not make a deal work.   They are based on a process of steps, and are not based on making money and they can take some time to get.  Since real estate investors live in a deal-oriented, competitive world I can see how they could be frustrated by the grant process.  For one thing, grants are never guaranteed.  Secondly, it can take several months to get a grant so if you are working on a project where you need quick funding, grants are probably not the best way to go.

Let me explain it a little more specifically.  A funder who gives away a grant gives it away so that it will solve a problem.  This problem could be any kind of problem – a health problem, a social problem, an environmental problem, a housing problem, etc.  In and of itself a grant isn’t about making money; it’s about having an impact on a problem.  The funder invites people to apply for this funding by submitting a proposal as to why their potential solution to the problem is the best one.  Then the funder reviews the proposals received and chooses the ones that they believe are most likely to solve the problem.  Thus, there is no guarantee that a proposal submitted for funding will be approved.  It’s a process of steps.

Having said that, I believe there are many potential applications of grants for real estate projects for those real estate investors who are truly committed to working on projects that benefit communities and those who focus on long-range planning and holding onto their vision and are willing to think outside the traditional real estate box.  My nonprofit organization, Homes That Change Lives, since 2011, has purchased more than 100 bank-owned properties that have been resold to low and moderate income home owners. This program was managed by, guess who, a real estate investor!  He saw the potential and stuck with it and it worked!


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