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Editors’ Note: This article was originally written for the Summer 2025 issue of Nonprofit Quarterly Magazine, “Land Justice: From Private Ownership to Community Stewardship.”

Steve Dubb: What are some key things nonprofits need to know about real estate, regardless of whether they want to own real estate themselves?

Rudy Espinoza: First, that it is not that complicated. Most of the information is out there. The process of acquiring, even the process of managing an asset—it’s not rocket science. That doesn’t mean that it’s easy. It just means that it is easy to understand. It can be learned.

Allison Wagstrom: I agree that it’s knowable and that there are people who gatekeep the information. I mean, people are trying to make money, but there are a lot of places that will give you that information if you try to find it.

“The process of acquiring, even the process of managing an asset—it’s not rocket science. That doesn’t mean that it’s easy. It just means that it…can be learned.”

I also think that real estate has to be connected to the mission. When you’re thinking about owning real estate, it has to be something that makes sense within the context of the organizational mission and within the overall strategic planning of your organization.

RE: I also think that everybody needs to learn a little bit about it. I think that sometimes in our mission-driven space, we have a little bit of an aversion to it, because it’s finance, it’s transactional. It might even be against our political beliefs to own land and to hold it.

But it’s important for us to build at least a little bit of a skill set—maybe not to be experts, but enough so we can make good decisions and navigate the world.

SD: Allison, you said that there are plenty of places that will give you information about real estate. What are some of those places?

AW: Propel Nonprofits [my organization]. But broadly speaking CDFIs are great resources for this kind of information.

Also, people in your network who have gone through this experience are great places to start. Other nonprofit leaders who have purchased real estate or currently own real estate are always a great way to begin the conversation of “how did that work for you?”

SD: Rudy, a couple of years ago you wrote about how your organization, Inclusive Action for the City, decided to pursue real estate ownership to prevent displacement of community-based small businesses in Los Angeles. Can you talk about the decision that real estate ownership was necessary to do that?

RE: It came organically from the experiences of our small-business borrowers or the folks that were participating in our micro-loan fund.

The three major pillars of the organization began organically. We began with advocacy work, and one of our first big campaigns was the effort to legalize street vending. As we were advocating for a change in those systems, the street vendors highlighted the fact that they were worried that they were not going to be able to access capital.

We did a little scanning, and we realized they were right. Soon after, we decided to prop up our own loan fund. That’s the second vertical of Inclusive Action that has now become a major piece of the organization and has allowed us to be a certified CDFI lender.

Then, some of our brick-and-mortar clients were concerned about landlords. They were asking for legal support to negotiate leases. And at the same time, there was a lot of activism in our neighborhoods around gentrification. We asked ourselves, What do we do to proactively support our clients who are dealing with landlords that are looking to extract and move people out without any good reason? That’s when we started to work on our third division, which we call community innovation, a vertical that’s exploring different ways to support neighborhoods, and real estate is one of those interventions. It all came from the experiences of the clients that we were serving.

SD: Allison, in your consulting work, how often do you come across nonprofits seeking to buy property, and how do you advise them to think about the rent versus buy decision?

AW: Often. I just did a quick scan through our CDFI loan fund to see how many nonprofits are looking for loans, and we’ve got a good amount of people we’re working with right now who are along various points of that feasibility scale to understand if they’re ready to buy property.

And the way that we advise them is…first, does it fit your mission? For many of our clients, they’re doing what Rudy is talking about: They’re trying to buy their building that they are currently living in or renting in, because they want stability.

Then, we get into what does it take to use fundraising and debt capital to purchase a building? And then, what does it take to actually own and operate a building? There are tools we work with them on with cash flow and debt service coverage and pro formas that, as Rudy said, are not hard, but they’re not easy.

You just have to spend some time with someone who will work with you on that. And that’s what we do through our technical assistance program: We work with people one-on-one, helping them to understand the capacity of their staff and their organization and whether they need to outsource certain parts of this process.

SD: Post-COVID, there has been a trend toward remote work. Has that dampened interest in ownership?

AW: In Minnesota it’s changed what they’re looking for. They are looking for community space.

I think the need for spaces for people to gather has not gone away; in fact, it has ramped up in what I’ve seen. People are needing access to large spaces to build meetings, to gather together as groups, to do birthday parties, to do cultural celebrations, to engage in one-on-one and group activities.

Whether or not they need access to a five-story building with cubicles is another story, but buildings are still needed. Space is still needed, because many in the nonprofit sector were never able to fully go to remote. Their clients come to them directly, and they need private offices….So, while it has changed, I don’t think it has dampened.

SD: Rudy, I wanted to ask you about CORE—Community Ownership of Real Estate—the alliance of nonprofits in East Los Angeles. Could you talk about its purpose and the key steps in the real estate acquisition process?

RE: In 2016 or 2017, we began to ask ourselves, What would it look like if we began to acquire real estate? The challenge that we had, simply put, is that we didn’t have money to do it. At least not enough. So we decided that we could begin to accomplish our goal of acquiring commercial real estate if we partnered with other organizations.

The origin of our partnership was in the idea that if we joined forces with other mission-aligned organizations, we could assemble capital to buy property together. This partnership was also encouraged by the CDFI Genesis LA that had New Markets Tax Credits (which work like equity or cash) to allocate, and our project qualified under federal rules. We would hold the buildings together during the seven-year period required by the tax credit rules, and then we would work with the tenants to transition ownership to them, or maybe hold it in perpetuity, to keep the spaces affordable.

Together, we’ve bought five buildings since 2019. In total, we have a little over 20 tenants in those buildings. I’ve learned a lot about partnerships. If I were to do it again, I would do it a little bit differently. I would still partner, but I would really have some tough conversations about how we’re going to address possible crises like a pandemic, and how we’re going to deal with leadership transitions. How are we going to deal with tenants that don’t pay? All the hairy things that are really tough no matter what, but are extra tough if you’re not prepared.

SD: What kind of decisions would you do differently?

RE: CORE’s partners are Inclusive Action, East LA Community Corporation (ELACC), and Little Tokyo Service Center (LTSC). ELACC and LTSC have been around for decades. And they’re known, they have good reputations, and I enjoyed a personal friendship with the leaders of those organizations.

When we began, we leveraged our friendship a lot. Because we trust each other so much, when it came to writing up the agreements and our roles and responsibilities, it was easy for us to not get into the details of all the specific things that one should get into.

I don’t think we did enough to document how our entities should work together in the eventual scenario where leaders transition. In our case, two leaders transitioned in the early phases of the project.

So, you have these new faces that are in, and then they’re like, “What is this? Why would you partner with two other organizations and buy five buildings to not raise rent on people?” The OGs are now in a position to have to describe the intentions of the project.

And without having documentation, it’s harder. So, now we are generating new legal documents to refine our roles and responsibilities for the next two years, which we should have done long ago. The point is: You might trust your friends, but you’ve got to write expectations down.

Last year, we had to make some challenging decisions related to a tenant who was unable to pay their rent. These are moments where we have had to be united as a partnership. Not only united in what we’re doing, but also in the way we respond….These are the kind of things that nobody talks about when they are in the space of “we’re going to own stuff.” It’s hard.

AW: Thank you for sharing that. That was really validating to hear that other people go through that.

Your documents become so important, like Rudy’s talking about, and having everything written down.

“The thing that I’d say to [nonprofits that] want to own buildings in Minnesota was: ‘Who’s going to make sure the sidewalks are shoveled?’”

It sounds so boring when you’re looking at architectural drawings and dreaming about what the space is going to look like, but some of the most important work we did was document retention.

Because people leave, people move on. Your great property manager gets another job because somebody else hears they’re a really great property manager. And good for them. They get a new job with maybe better benefits.

At the really micro level, the thing that I’d say to people [in nonprofits] who want to own buildings in Minnesota was: “Who’s going to make sure the sidewalks are shoveled when your vendor doesn’t show up to shovel them?” Because they have to be shoveled by 8:00 am or people are going to fall, and that has consequences.

That was the test that I’d sometimes give management when they started talking about their dreams of owning buildings.

RE: You could see how that’s a vibe kill right there. But it is critical. And man, that’s the work that I think in our space we need to invest in more, especially on the Left, which embraces ideals around community ownership, co-ops, and other people-centric ownership models.

I’m about that life. But there is a rigor—the work behind the scenes that makes it all happen. And it’s not really romantic, the snow shoveling. It’s not, but somebody has to do it. Otherwise, you can’t really talk about the rest of it.

SD: Rudy, for CORE, the New Market Tax Credit period is ending in 2026. How are the tenants responding to the possibility of becoming building owners themselves?

RE: We haven’t prioritized that conversation, because we’ve been focused on stability. Some of our tenants have been just trying to recover from the pandemic. And our focus has been on making sure that they could stay. If they’re behind in the rent, it’s about trying to figure out how we could get them on payment plans and help them catch up. The other piece of it, honestly, is that we also need to be unified as community partners on what we’re going to do.

“Make sure that people are building business models that can support paying for the property management you need.”

There are three properties out of the five that have tenants who are interested in being owners. One of the buildings has a very active land trust locally that’s already said they want to acquire this building. So that’s awesome.

But how much are you going to sell it for? Some of us say, “Just sell it back for what we paid for it. Like, no interest, let’s go.” Others are like, “Well, no, we’ve got to recover some money.” And there’s truth to both sides. So, we have to iron that out.

SD: How can the overall challenge of property management best be addressed?

AW: Well, money helps. I think for nonprofits, it’s part of the ongoing conversation about business models, generating surpluses, and reinvesting in organizations’ infrastructure in order to deliver their organizational goals. It’s part of a larger conversation we have in our sector about, “How do we support the infrastructure of organizations instead of just programmatic support?”

Because the flip side of building maintenance is when it’s year 20, and there’s been deferred maintenance for 20 years. At that point, it’s no longer an asset. It’s a liability.

What we really work hard to do is to make sure that people are building business models that can support paying for the property management you need and not treat property management as an afterthought.

In capital campaign funding, the hardest funding to do is the last 15 percent that you fundraise for the programs and the reserves. But it’s also the most vital to secure the future of the organization. So that question, really, for the nonprofits we’re talking to is what a sustainable business model is about, and sustainability being not a destination but a way of life.

RE: The property management that is ideal for a community ownership project or an affordable housing development—any property that might be in a low-income neighborhood—is a compassionate property management. It’s a management that is working with tenants, helping them problem solve, in some cases even connecting them to resources.

I serve on the board of Abode Communities, an affordable housing developer here in California. They’re really grappling with this. The financial model doesn’t make sense because the clientele that we have, the tenants that we have, need so much support, and therefore you need to budget for a really good, hearty set of property managers that are going to spend the time, and it’s not going to be a transactional situation.

But a property owner or a developer is also contending with all these other costs: the price of land, the price of building, and more. So, we need a policy to keep prices low for real estate and for development.

Some of the mission-driven owners and developers want a really amazing property management team, but they can’t afford it, because they spent all their money buying the property or building it. Something has got to give.

As a country, I think that we need to think about how we are going to clamp down on speculation that’s driving up costs in an extraordinary way.

Somebody was complaining to me that it costs $600,000 a unit to build housing here in Los Angeles. And that person was saying, “This is because of bureaucracy, corruption in the government, in the nonprofit space.”

I don’t think it’s that. I think it’s that we are allowing the market to go out of control. Like the house that I live in, it went up in value $200,000 in the last two years. I didn’t do anything to it. How are we capturing the value of this speculation?

AW: It’s really a smart point, and one that I hadn’t thought of. But I’ve always thought about, “What’s the collective solution to property management for nonprofits, specifically?” Is there a way we could band together? And I look to our co-op siblings on some of the ways they’ve done that—and wonder how to be successful doing that.

RE: Thank you for bringing me down to earth, but on the property management issue, some of my colleagues have talked about it as part of a workforce strategy. How can we train new property managers here in Los Angeles? Is there a community college route where you have a certification, where we have a need for compassionate property managers? It’s not rocket science, but there is rigor to it. There is a lot of opportunity—one piece is training them, the other piece is figuring out how to pay for them.

SD: Allison, you wrote about the role of forecasting in the real estate acquisition process, including things like how much space you need, how much money you’ll need to raise, and more. How can nonprofits address these kinds of questions?

AW: The first thing is to really just sit down and have a conversation about: what is your current budget? What are you looking to achieve going forward?

And forecasting is built on solid budget assumptions. You start with where you are. You know what your budget is. And you move forward.

Figuring out the feasibility of owning a property is really done by going through a feasibility study. We recognize that organizations—specifically Black, Indigenous, people-of-color-led organizations—were struggling with accessing this service.

So, we had a very small pilot program of funds available to only that group of people to help them hire someone to do all of that work.

Because it’s not necessarily a skill set that you are going to develop yourself; it is often someone else working with you. But if you want to develop yourself, it becomes like, how many people are we going to serve? And you [and that leads to] how much you need, and that gets you to the space question. And then I take into account what adding a building in is going to do. How much more mortgage could we take on versus rent?

And that’s why, for many nonprofits, conversations with CDFIs are such a good opportunity, because so many of us are here to help walk through.

“We’ve entered this new dimension where we are also now implementing the systems change.”

SD: How does owning property change a nonprofit’s business model?

AW: It changes your assets and liabilities. It increases your maintenance. It increases certain areas of your expenses. It decreases some other ones.

But I think the change for me is really, when you own a building, the organization’s mission fit changes, their approach to care of the space is different. They’re part of the neighborhood in a different way than they used to be.

RE: I don’t feel like we have changed from a heart perspective at Inclusive Action, but it has introduced a new dimension to the work.

Sometimes it’s easier to be on the outside, saying, “The system sucks. We need to change that.” That’s where Inclusive Action began. And a huge part of our identity today is our advocacy work.

But we’ve entered this new dimension where we are also now implementing the systems change. We’re helping to implement the street-vendor policy we advocated for. We’ve become lenders that have regulatory issues that we have to contend with. And in this case, we’re not only saying, “Gentrification sucks,” but we are owning the land ourselves and figuring out how we manage this. How do we come up with legal documents and transfer ownership? That adds a different dimension to the work. So, for example, with a tenant we were asking to leave—they hadn’t paid rent in a significant amount of time—you want to care for them, but you also have to care for the model that was designed to care for the whole group of tenants and the properties they operate out of.

AW: No, I get it. I had to evict an organization when I was a leader whose organization owned a building. And it was like, “You haven’t paid your rent in a year.”

RE: My colleague at work is a staunch anti-eviction advocate and leader. So, we’re in both these worlds, and he was like, “How can we do this?”

And I was like, “Bro, this is what the reality is.” This is what we’re contending with in the system. The fact is, we work in this system.

There are things missing, right? There should be a social safety net to support this entrepreneur that wasn’t able to make it happen. There probably should be more support for the organization that’s managing this building.

But we have to make tough decisions. At times, I feel that I don’t want to do this ever again. But the higher path requires that we lean into it. We’ve got to figure it out. And that means we sometimes succeed, and sometimes we find ourselves in tough situations.

AW: I really honor the straddling of worlds you must be engaged in. That must have been heartbreaking.

“We have to step into this arena, even though…it’s going to force us to confront all our contradictions. And I’m really excited about what’s possible.”

RE: It’s sad. It sucks. It adds a different dimension. I’m down for co-ops and socialist values. But also, I got to actually operationalize the vision.

AW: You got to pay the people that work at your organization. They need livable wages. And I wish co-ops were more dominant.

SD: To close in a more aspirational direction, what roles can nonprofits and movement-based organizations play to further community control of land and land justice?

RE: We have to step into this arena, even though it’s really complicated and it’s going to force us to confront all our contradictions. And I’m really excited about what’s possible.

When I talk to people on the other side of the political spectrum who are amassing a lot of wealth and buying a lot of properties, I realize that they’re not any smarter than us. And they don’t know too much more than we do. They’ve just been willing to get in and ask questions and kind of like elbow themselves into these rooms. And they’ve used privilege to get there.

But we also are capable. And we must get in.

One of the people that I admire is the “Father of Harlem,” Philip Payton. In the early 20th century, he had an opportunity to buy land. And when he was able to buy land, he was able to allow Black people to move into a neighborhood they were historically shut out of. I’m excited about that same idea in our communities. We’re going to be playing defense for sure, but we’re asking, “What is the opportunity?” I think that we as a field have to lead that.

AW: I think, fundamentally, if we believe in the power of collective work, and nonprofits believe in that power, then we are one of the levers we can pull to ensure that neighborhoods are owned by the people who live and work in those areas. And I think neighborhoods should be part of the solution.

I know it is tempting to look at the national stage as our solution, but I’ve been really focused on what I can do here block by block, city by city, in the Midwest.

How do we improve the daily lives of individuals through our work with nonprofits? One of those ways is through community ownership of real estate.