 and welcome to the nonprofit show. We are so glad that you're here. Today we have what I like to consider a conversation that we haven't had much of in the last 800 plus episodes. So Dan Klatt is our guest today, the man of the time, the man of the hour, excited to have you here. Dan, you're known as the church guy, which I love that. And you're gonna talk to us about church space needs and real estate. So stay with us, because as I said, this is not something that Julie and I have really touched on before. So it's a new conversation, which we didn't think was possible, but here it is. So Julia Patrick has the day off today. We wish her well, so she can continue to do well. Julia Patrick is the CEO at the American Nonprofit Academy. And I'm Jarrett Ransom, your nonprofit nerd CEO of the Raven Group, an honor to serve as a co-host on the nonprofit show. I know a lot of people say to us, Dan, like I cannot believe you've done this day in and day out since March of 2020. And sometimes I say, I can't believe that either. But here we are. Thank you to our amazing presenting sponsors that allow us these opportunities, which I really have grown to love. So when I'm not on the show and I'm not part of the conversation, I genuinely miss it. So a huge shout out of gratitude to our friends, our investors, our supporters, our partners. So thank you to Bloomerang, American Nonprofit Academy, your part-time controller, nonprofit thought leader, fundraising academy at National University, staffing boutique, nonprofit nerd, as well as nonprofit tech talk. We are so glad to have them supporting us in this episode and every episode. So thank you so much for that. If you haven't checked out all of our episodes, you can do that. We stream on many platforms, including Roku, YouTube, Amazon Fire TV, Vimeo. And for those of you that are podcast listeners, you can queue us up wherever you stream your podcast as well. I know I start my day every single day, yes, with the nonprofit show, but also with a podcast. So please join us there. Without further ado, so excited to welcome you officially to the nonprofit show, Dan. Those of you watching and listening, Dan Klatt joins us. He is the church guy. So welcome, Dan, so glad to have you. Thank you, it's great to be here. I've been enjoying the show since I met you last month. Well, thank you and a nod to Cammy for the introduction. You know, many of our guests introduce us to other amazing guests and you're one of them. But if you would start us off telling us a little bit about yourself and how you became their church guy. Well, I'll keep it short because we have a lot of time, but ended up with the real estate because I thought I wanted a business broker and I hated it. I was on my way out of real estate and my pastor called me and said, the board decided to sell our church. You can list it for us, can't you? Okay. And I was like a torn inside, but I thought it would be a good project to bridge me from this broker to another type of career. So yeah, I'll do the project. I took it on in my life. Wow. I can't imagine because it's a little bit different. I would think from other real estate, I've not gone through any real estate training, but what I've heard is there's a lot of eyes to dot, a lot of T's to cross. And I can't imagine between commercial real estate, residential real estate, does church fall, where does church fall within those two? Or is that a separate category? No, it's a commercial real estate product. Okay. But yeah, it's extremely unique. There's not just a few different. So you've really, that's very interesting. So you've really made a name for yourself, obviously. And really the church guy. So you work across the nation. And when you and I chatted, Dan, I really enjoyed learning about you and the team that you have. So you have a team, is that right? That also serves the nation? Yeah, we have about 104 agents that we're working with. And some don't have church deals, but about 30 or 40% of them have church projects that are working and I'm coaching them through the process. Okay. Well, let's get very interesting. Let's get started in this. And the first question is why is it so hard to find church property? What are you seeing for this? Is there even church property available? Or is it like a dime a dozen? Or what are you seeing for this? There are very few empty churches to be purchased. And the ones that are empty are typically very old. I'll have sprinklers for them. And it becomes parking limited. But the general answer in, because so we convert office products. But the general answer to your question is usually parking big challenges, our big number one challenge. Many of the churches that were built years ago in the 40s, 50s, we didn't drive so much. We didn't have as many parking. We did those big parking lots, but we were very mobile. So that's what creates the biggest part of working. And how has that shifted with COVID, March of 2020? I know when I shared with you, I have yet to step foot into my church, right? Because there's still so much of that streaming capability. And let's be honest, I can go to just about any church that still has that streaming capability. So I'm curious if you've seen an increase of church properties since March of 2020. Yeah, there has been. Certainly fallout. We've seen more than I expected. So, yeah. Is there any particular region that you see like getting hit harder than others? I'm just curious as you and your team serve across, the states, is there any particular area that you're seeing a higher increase of this? Yeah, the East and the Northeast. Interesting. More, yeah. Okay. Well, and the other thing I see and I saw this during the height of COVID as well is capital campaigns and the improvement for churches. And so really learning all about this is just fascinating to me because it is such a niche market. And as you said, they don't come up often, but when they do, it takes a special touch on this. So talk to us about the preparation for purchasing church property. Is this something that it's a normal transaction? Just as many of us, maybe if we've purchased a home, would expect to go through, talk to us about the preparation of this and what we need to consider when purchasing church property. Sure, the main thing that you got to do is have a down payment. And that's a challenge for a lot of churches that sometimes it takes years to save up that down payment. And, but as far as bought, like you mentioned, buying a home, buying a church is similar in some way. The income, the income to cash flow, they don't want the mortgage to be more than 30% of your cash flow and then going to buy a home, they don't want your more than 30% of your personal cash flow. And so, and then they look at as far as ability track record, want to go back three years, but one thing that we do is we evaluate a church congregation to determine what they actually need rather than buying what they want, which is usually a bigger than what they need. So that they can be financially responsible in their transaction. And that's just being a good steward and responsible with all the money that people. Yeah. I'm curious, Dan, because I've seen this happen in nonprofits is, you know, I'm the leader, the founders. I'm gonna start back in the beginning, right? Really the founders that they will get credit or purchasing power based off of their individual credit and purchasing power. When it comes to really purchasing church property, I would imagine this would be the congregation or the churches or the churches or the churches like business entity, if you will, are we coming off of their, you know, entity purchasing power or is this ever tied to individuals? It's never tied to individuals. There's never any personal guarantees or anything like that. It is based off of low and stability. Okay. So lending to churches is a whole art in it, as well as the real estate. There are only a number of, all number of banks that will lend because it's so specialized. Talk to us about that, because I love that you had the foresight to go there because that was gonna be my follow up question is, you know, what are these financial institutions? And I know right now as we're recording this and talking about this live, we've had in our nation some financial institution upset. So is this a risk? And again, what are those institutions that do tend to focus on this niche market? So it's not necessarily a high risk market, but you just have to learn about how to ensure it. And a lot of, I'm just, how to lend to it, in turn, but because again, you have to figure out what they need and what they should have rather than what they want. Because collectively, I'm collectively a church and individual, we always want a little bit more than we can afford. And so we have to read their expert. Yeah. By our rails. I feel like there needs to be, I mean, I'm gonna call out HGTV because that's what I love to watch as well, but there needs to be like a buy, sell or trade, maybe church guy episode. I think that that would be very interesting to see and to watch how this transpires and how it transpires in different regions with different people, which takes me to the people. Who is involved in purchasing this church property? Does there need to be like a task force created by the church board? Who's involved with this as well as your real estate providers, who's part of the conversations and the transaction? So usually it's the pastor and one or two of his leadership team. Not necessarily the whole leadership team, but eventually we get there. As you know, with nonprofits, there are layers of approval that you have to climb the ladder and you get an approval and then it goes to the next step and you get another approval and so it's on that way. You know, I always say that approval process is hurry up and wait. It's like hurry up and wait, hurry up and wait. So talk to us about the timeline. What would be on average? I'm sure they're all different. I bought a couple of homes in my life already and I know that my residential transactions vary, but what are you seeing by way of timeline? So if there's someone watching and listening and they're thinking, you know, I would like to purchase a church property. Is this something that we can consider within the next 12 months, six months or do we need to think further? So yeah, our deal cycles, whether you're buying or something, they kind of send an amount of time and it's 18 to 24 months. 18 to 24, oh, that's interesting. So I would consider then, you know, for many of these churches, if they're doing a strategic plan or thinking about a capital campaign, you know, looking at that 18 to 24 month, that is quite, I don't know, that's quite a timeline because there's a lot I'm sure that changes. And as you said, maybe properties are coming on the market, maybe they're not coming on the market, but that 18 to 24 month is a really good, I think benchmark of knowledge to know so that we can plan, get everyone involved, get our financials in order, you know, and really truly prepare for that. So I feel like we might have asked this question or should have asked this question earlier, but I'm curious if you can talk to us, Dan, and I feel like, you know, also it's a really big open-ended answer here. This could be an episode in and of itself, but would you talk to us about what charitable real estate is? Charitable real estate is, I think it comes mainly when people want to leave a legacy. We assist in helping churches up legacy programs and non-profits set up avenues, non-profits that don't give some real estate. But when Aunt Elsie dies and she has a cabin in Utah and you live in Texas and you really don't have any in the cabin and you really don't need any extra money but you'd like to donate it, that's the perfect vehicle. You donate it to your church or your favorite non-profit. And so we assist in processing that, take that property when it's donated, we turn it and we give about 92% over 90% of money back to the non-profit and that's pretty cool. It's neat to be a service like that. Absolutely, and I'm sure you mentioned earlier your team, how many agents again do you have working with you, Dan? 104. 104. And is this all that they do or do they diversify in other properties? I think I heard you say a percentage of their portfolio is church properties. Right, so they're real estate professionals that needed help with learning how to do church because they have a need or they would like, they have an interest and they just don't know the first. Well, many of the agents had got a hold of me and said, have this church that wants me to do so and so and I just don't know what the first step is. But I mean, I just don't know what to do, help them. And so I join up with them and help them. Yeah, no, I love that you're there as that resource. I mean, from the non-profit nerd to the church guy, right, like it's just, we've definitely, we know our market, we know what we're here, as you said, to be a servant and to serve in that way. I'm curious, and we love this question. What do you see as the forecast going forward? There's a lot of uncertainty when it comes to the economics. I mean, this is, if Dan had a crystal ball, right, what would that crystal ball tell him? With the foresight and the foreshadowing of the future. What are you predicting we'll see will happen, especially within our faith-based communities? Well, I think, you know, faith-based communities thrive. Wouldn't it be possible? A lot of churches found new members during COVID. Whether it was on Zoom or those that were able to meet in person in various states, they were able to meet in person throughout most of COVID. And so there was a little bit of growth accumulated by COVID and personal growth. There was cleansing, I don't know if you would call it a cleansing, or a person of smaller, weaker churches that died off, but those people went elsewhere. And so, and also people that weren't going to church started going because they were facing, you know, many people, they were facing death. And so, actually, we had about a three percent growth during COVID, or my own growth. Wow. Did you see that also transpire into an increase of financial support and resources? Because I'm curious if that kind of goes along with the congregation or the membership. I know we can all give and tie at different levels, but I'm really curious if, you know, you also saw an increase that was kind of parallel to that when it came to the financial support. Yeah, so I was speaking to the financial increase in finances. The congregation was split up between Zoom and Kirk, it was hard to count, it was, you know, but when we were able to meet again, we finally have now surpassed pre-COVID number. And so, yeah, it's COVID, I hate to say this because I know it's not true for every Kirk COVID was actually good for our church. Yeah, you know, that's fascinating. There's been a lot of silver linings, as I would recall as well, you know, when it comes to the global health pandemic. And I do think because we're in, you know, such a polarized state of mind, you know, across our nation, across our globe really, we're also leaning in, we're craving community, we're craving, you know, to know that we're not alone, we're craving that interaction and connection. And whether it's done in person, whether it's done, you know, through a virtual community, I too have seen a huge, what I would consider a huge uptick, right, of connectivity of different groups, both faith-based and non-faith-based. So that's really interesting. Do you think that it's here to stay? Yeah, COVID? No, the connection, like the increase to the faith-based, like do you think that we'll start to see that taper off over the years, or do you think it's here to stay? I think it's here to stay for a while because I am hearing little bits of increased energy all over the country. Good. And that's the problem. Yeah, and I too have seen an increase in capital campaigns, as we mentioned earlier, in particular for churches and faith-based organizations, and looking at how they can better serve, probably an increased congregation or membership, how can we make the property more accessible, the car parking situation, there's so much that goes on with that. This has been just fascinating, Dan, and I'm curious, and a lot of this conversation, as I told you, it's very unscripted, we just open up, we have a conversation, and because this is a topic that the nonprofit show has not really dug into in the past, I'm curious if you could talk to us a little bit, if we wanted to sell a property, how that might be different? Because we talked about the purchasing, we talked about the preparation, what if we are one of those churches or congregations that says, we've held on as long as we could through the pandemic, we're barely scraping by, we would actually like to consider selling. Do you and your agents help as well with the selling of properties, and what does that look like? Okay, great. So the good news is, you don't have to fix up a church, so you can sell it as if the people coming in have all kinds of ideas on what you want to do anyway, so it would be a lot of wasted money. So that's one thing I would recommend, don't fix anything, unless it's something mechanical that doesn't work, like an earthquake or a plumbing leak but worry about any cosmetic or functionality of the door swing or anything like that, it'll be fixed up. So that makes it easy, the hard part is being in the waiting room, that 18 to 24 months a long time, a long it. And the only way that you can feed that up is dropping the drop, directly, need that provides all that money. So it's kind of a tight rope lock. Oh wow, there's a lot to think about but I'm so glad to know that you and your team, really here to help with the charitable real estate, here to help with the transactions. As you heard, Dan, the church guy, he has agents across the nation, so no matter where you're located in the US, someone can assist you and Dan will see to that. So Dan, you had mentioned your web address, would you mind telling our viewers and listeners where we can find more about you? Yeah, my email is dan at churchguy.net and our web address is churchguy.net. Perfect. Well, I have a feeling there's gonna be some people listening to this, sharing this episode. As a reminder, Julie and I, we provide these conversations each and every day. I'm so glad to be of service to you, to the topic, honestly, Dan, to talk about this. I'm so very grateful to have the support from our many presenting sponsors. Just a few hours after today's live conversation that we're having at this moment, this episode will be woven into all of our platforms and I wanna say thank you, because the reason we're able to do this is because of our presenting sponsors. So huge shout out of gratitude and thanks. Go to Bloomerang, American Nonprofit Academy, your part-time controller, nonprofit thought leader, fundraising academy at National University, staffing boutique, non-profit nerd and non-profit tech talk. Please check these companies out because they're here to help you, they're here to support you. And Dan, again, I'm so glad to have you here. It's such a niche market, something that we haven't talked much about. We've talked about charitable real estate, but there's a whole nother sector within our nonprofit sector of churches that require a little bit more hand-holding in certain scenarios and the purchasing and the selling of the properties is definitely one of them. So so glad to know that you're here in our corner, Dan. Thank you. Thank you so much, it was great to be here. I really appreciate the invitation. Yeah, and thanks for all you do and your agents do to serve our community. We're all in this together and I hope that you have a fantastic day. I hope all of you have enjoyed this conversation. If there's someone that you think needs to know about it, please share, let them know. And again, as we end every episode, we like to remind you, our viewers, our listeners, our guests to please stay well so you can continue to do well. Thanks everyone and I'll see you back here tomorrow.