How to Blend Mission and Money in Real Estate
One for-profit business selling property to another is straightforward, as is one nonprofit organization selling a property to another. But what about a husband and wife who want to sell a rental property so that it sustains them in retirement but also want to ensure that the property continues to do good in the community?
In that case, you need an expert. For the Patel family in Oakland, California, they needed DCG Strategies.
The Mitchell Hotel
The Patel family has owned the Mitchell Hotel for the past 70 years or so. Harry and Reshma Patel had owned, lived in and operated it for the past 32 years. Their son, Bhavin, had grown up in the property.
But the area in Oakland around the Mitchell has changed since the hotel’s construction 114 years before. So had Harry and Reshma. They were getting older and looking to retire.
The family wanted to sell the property, but they didn’t want to see it torn down. They wanted to sell to someone who appreciated the property’s history and their family’s legacy, and who would use the building to do good in the community.
They tried a couple real estate agents without any luck.
“I told my dad, ‘Let me try to find somebody with experience with this kind of thing,’” Bhavin says.
He searched for a firm that specializes in working with nonprofits, and he found DCG Strategies.
Jamil Muchell is the brokerage services manager at DCG. He grew up about 10 minutes from the Mitchell.
“The one thing I really appreciated about Jamil was that he took his time,” Bhavin says.
Muchell met the family at the property and listened to their dreams for it. And he told them the hard truth: No one would want to buy the property as-is. (The Patels had been renting it as a single-room occupancy building, mostly serving people just out of jail or on the edge of homelessness).
“Let me see what I can come up with,” he told them.
He brought in someone to draw a property map and put together a property listing. He worked through DCG’s extensive network of churches, nonprofits and government agencies. He took calls, gave tours and fielded offers. “The biggest challenge,” Muchell says, “is how to mix money and mission. That’s a delicate balance.”
Striking that balance meant rejecting the first few offers that didn’t meet their needs in terms of price or building use. After about eight months of showing the property, Muchell had identified a promising offer that checked all the boxes, an Oakland church that wanted to use the building as a halfway house for men released from prison.
Closing the Deal
Kingdom Builders is a growing, non-denominational church with a heart for service. They were already working with stage agencies to secure grant funding for a transitional housing program, but they needed a place to put it.
Muchell helped Kingdom Builders with its grant submission and took three months negotiating a deal that was fair for both sides.
Ultimately, the church and the Patels agreed to a five-year lease with the option to purchase at the end. Kingdom Builders got their grant funding, did extensive renovations to the property and, in fall 2017, opened the Dream Center — a transitional housing center with 100 beds and classroom space for teaching and mentoring.
Bearing Good Fruit
The Patels stop by the Dream Center periodically. Harry and Bhavin visited this past Thanksgiving, a little over a year after the center opened, to drop off pies and bread rolls.
Bhavin spotted a man he’d met several months earlier, soon after the center opened. Back then, the man walked glumly, with his head down. Now, at Thanksgiving, he was smiling and happy. Bhavin asked what had happened. He got a job three months ago, he was told. The man is working every day now.
“You could see what a difference this place has made in his life,” Bhavin says. “It’s exactly what my Pop wanted.”
Looking back, Bahvin has trouble imagining getting to the Dream Center without DCG.
“Jamil brought us not just a client but a partner — they’re taking care of the community,” Bhavin says. “Without Jamil, the deal doesn’t go through. We’d still be holding the property.”
DCG uses its expertise in all levels of real estate development, sales, financing and management to help churches, schools, nonprofits, government agencies, and other commercial entities across California.
Click here to learn more about the services that DCG provides.