church

Selecting and Purchasing a Site for Your New Church

If your church is planning to build a new facility at a new location, you need to know how to acquire a good piece of real estate. In this article, we will look at how to select and purchase your new site.
Selecting the Site
There are a good number of criteria to analyze when looking at a piece of land for your church site. What appears to be a “great deal” may actually not be a good value when development costs and site limitations are fully considered. Don’t simply rely on the opinion of the selling agent, or on rules of thumb such as one acre per 100 seats, when evaluating the land. Land development professionals such General Construction Services List as architects, appraisers, surveyors, civil engineers, building contractors, building inspectors, and others, can give valuable information to the church to help it determine the true value of the property. Factors affecting the value include zoning, amount of usable land, utilities, topography, soil conditions, shape of the land, location, access, environmental factors, permitting costs, and more.
When we speak of usable land, we are referring to the land that you can actually build on. This is determined by subtracting all the building setbacks, easements, and restrictions from the site and by evaluating the shape and topography of the land. The costs of bringing utilities to the site, or leveling the site for buildings and parking areas, can be a “budget-buster” for some churches. The land purchase should include a contingency clause allowing you a period of time to investigate these factors before closing.
Keep in mind that the cost of the land may seem “cheap” but the cost per acre could soar when the church accounts for the limited amount of usable land and the high development costs for the property.
Purchasing the Site
Now that we have discussed some factors to consider when selecting your church site, we should consider a contingency clause within the purchase agreement to allow the church a period of time to investigate these factors before closing. There are several ways to accomplish this “due diligence”:
Option to Purchase: The church and seller can agree that in exchange for cash the church will have the sole right to buy the property for a specific time 2000 Sq Ft House Plans 1 Floor according to agreed terms. The option price is negotiable. The parties can agree whether the cost of the option will be applied toward the purchase.
Purchase Agreement with Contingencies: The church and seller may want to enter into a purchase agreement subject to certain contingencies. Those contingencies would be spelled out in addenda to the purchase agreement making the purchase contingent upon the church determining to its satisfaction that it can get financing, rezoning, utilities, feasibility and market studies, and any other information the church may deem in its interest before agreeing to close the sale. The church could even make the purchase contingent on a church vote or the results of …

Getting What You Pay for When Hiring a Church Builder

Inspections and Billing Review
One of the many services provided by architects on church Landscape Design Front Of House projects are site inspections and review of contractor billings. This is an optional service that may be of benefit to churches. The architect becomes a representative of the church during the construction process and attempts to insure that the church is not paying for work that has not been satisfactorily performed in accordance with the plans and specifications.
Most builders bill the church monthly for work completed during the previous 30 days. The architect reviews the billing from the builder and based upon his site inspection determines if the builder has, in fact, performed the work for which he is billing. The architect will either approve or modify the billing. If the billing is approved by the architect, the church pays the builder. The builder, in turn, pays the subcontractors and suppliers and receives receipts for the payments. If the billing is modified, then the church, the architect, and the builder must negotiate an agreeable payment for that month.
The architect is not in control of the construction of the project and therefore cannot be held liable for the failure of the builder to build the project with the proper materials and methods. Since the architect cannot be on the project at all times, he cannot be sure that the builder has complied with the plans and building codes. He also cannot be sure that all subcontractors and suppliers have to be paid by the builder.
While the inspection and billing review services of the architect are not without their limitations, they may offer an additional level of security to the church during construction.
Getting What You Pay For
In addition to inspections and billing reviews, there are several other things that a church can do to ensure that it gets what it is paying for during the construction process.
The church should try to pay at the end of each month only for labor that is completed and materials that are on the jobsite. If the church is working with a General Contractor (GC), the church would want an independent party, such as the architect, to approve monthly payments to the builder. If the church is working with a Wireman Electric Manager (CM), he will establish the amount to be paid to subcontractors and the church will pay all subs and suppliers directly. Especially on a GC job, the church needs a way to verify that those providing labor and materials are actually getting paid. The builder should return a signed receipt and waiver of lien to the church from each subcontractor receiving money each month.
When working with a GC, any changes on the project should be agreed to in writing. Since a fixed project cost is not established on a CM job, it is important that the church have an itemized project budget. The CM can offer the church a monthly comparison of the budget versus the actual …

Church Construction Loans – Tips on How to Get Approved

The best way to secure a church loan is to convince the lender that the church is stable, has a predictable three year stream of income, and is going to be able to repay the loan without any difficulties. The church lender must feel comfortable and it is up to the church leadership to put together a presentation that makes sense.
Preparation is key before approaching any lenders. Anticipate the questions that will be asked How To Become A Building Contractor and have the answers already prepared. Some of the things that a church needs to have are:
* Architectural Drawings
* A fixed rate contract with the builder, one that cannot go over the estimate.
* The contract with the builder must be an AIA contract; one that conforms to The American Institute of Architects industry standard guidelines.
* All plans and permits must be approved by the local municipality.
* The builder must have Builders Risk Insurance, NOT a bond.
This will help convince the church lender that church leadership has carefully considered all aspects of the church building financing and the churches revenue stream is going generate the cash flow and be able to handle the loan payments.
Church lenders make loans based on cash flow. For a church loan, this means the loan payment will typically be in the range of 30% of total income. Church leadership will need to examine their historical income and expenses to be sure that it will meet this criteria. The budget should be analyzed to see if there are any expenses that could be reduced. The church leadership will then have to agree on the amount of loan payment that they feel is affordable.
Another lending criteria is the amount of total indebtedness. The range for the maximum loan amount is generally three to five times annual income. If annual income is $300,000, then the loan range is going to be approximately $900,000 to $1.1 million. If the church already has some outstanding debts, then the maximum loan amount is going to be reduced. In some cases, it may be preferable to secure a church refinance loan to consolidate old debts with the new construction loan.
If it is necessary to hire an accountant, ask him how many churches he has as clients. Also determine if he Construction Executive Management is familiar with non-profit accounting practices. Take a look at the article we wrote on church financing.
After the construction is complete, the construction loan will roll over into a permanent church loan.
Getting approval for a church construction loan can be a difficult process, but it is easier when you are prepared.…