Like the Loch Ness Monster, Bigfoot and a good pizza in San Diego, grants for real estate investors are hard to find. Unlike good pizza in San Diego, they DO exist. Unfortunately there is a huge gap between what’s available and what most investors need to know to get it. Savvy investors get their rebates and incentives but few of us are actually cashing in and receiving large chunks of cash. However, we should be. Let’s take a look at the grant opportunity and some ideas on how to capitalize on it.
First, let’s dispel some common myths about grants:
- There is no money available for real estate investors. This just isn’t true. If you run a for-profit business (i.e. a C-Corp, S-Corp, LLC) you can receive grant money.
- There isn’t much money available. There are literally billions of dollars available in grant money for a variety of projects all over the US.
- Grants are only for non-profits. Again, completely not true. Plenty of organizations get funding for projects without being non-profits.
Let’s look at a recent example:
A recent $650,000 grant was available through the CDC to create healthier (greener) buildings. For-Profit companies were eligible. This is how it was described in grants.gov, the best resource for finding government grants.
“CDC’s Procurement and Grants Office has published a program announcement entitled, “Building Strategic Alliances for Healthy Housing.” Approximately $650,000 will be available to fund up to 6 awards. The purpose of the program is to reduce or eliminate housing-related health hazards and to promote housing that is safe, healthy, accessible and affordable. For complete program details, please see the full announcement on the CDC website at www.grants.gov. The estimated funding date is…”
If you were an investor in this market you could have received up to $110,000 to fix up (rehab) a dilapidated property. As long as your property created a healthy living environment and was safe and affordable, you’d be eligible to apply for this grant. So anyone who does fix-and-flips, especially on multi-unit properties should look closely at this opportunity.
Grants come in two basic forms:
- Government and NGO’s (everyone else). Government grants are given out for a variety of initiatives and can take longer to apply and find out if you’ve been approved.
- NGO’s can be a variety of organizations including: conservancies, private foundations, non-profits, high net-worth individuals, Fortune 1000 Companies, etc. They have their own unique qualifying process and can often make decisions quicker than Uncle Sam.
The following four topics/issues seem to have the most grant money available to them*:
- Water Conservation
- Green Building
- Assistance to lower income families and elderly
*As real estate investors #1-3 are key.
There are two steps to gaining grant money for your business:
- Finding grants- Combing through directories, lists, websites, foundations, etc may not be your idea of fun but it can be very profitable. You only need to find one grant to make it worth it.
- Writing grant proposals- Once you’ve found potential grants the next step is to write the proposal to the decision making body. You must follow their instructions to the letter and make a compelling case as to why they should give you funds.
In regards to both of these steps, I highly recommend you hire an expert to handle this aspect of your business for you. In the same way you wouldn’t hire a part-time brain surgeon, you shouldn’t hand this off to an admin or intern.
There are grant writers out there who specialize in getting grants for businesses of all types. With energy-efficiency a hot topic these days grant holders are looking for deals to fund. As long as you position your project as a green project and can demonstrate what you are going to do and the benefits to that specific community you’ve got a good chance.
Now if someone could just point me to a good pizza place in San Diego…