Financing Your Churches Future Home
by: BillTravis |
Total views: 4 |
Word Count: 814 |
View PDF | Print View
Share This Article
For most churches the purchase of a new church building is the largest financial transaction most of the members of the church have ever been involved in. As a result the process is one that can become intimidating to those charged with the responsibility to represent the congregation. It is a serious responsibility that in most cases will determine the location of your church for the next 30 - 40 years.
One of the most important tasks that the church will take on is selecting those who will help the church through this process. Many times a church will try and use real estate agents or bankers from inside of their church. The problem with hiring someone like this is that, most times, they are not specialists in the church field. Whether you are going to buy an existing building or you are going to build, it is important that you choose a team of church professionals, people that understand "CHURCH", church finance, and professionals that have a lot of experience in this process. Let me ask you a question. If you had a heart problem and needed to go to a doctor, would you go see a dentist? No, why not? But they are both doctors, right? But the dentist is not an expert in the field you need. You would go to a cardiologist, because that understands your problems.
When I meet with the church leadership for the first time I almost always suggest that they get a church friendly lender on board in the very early stages. Here's why. When you start shopping for land to build on or an existing church building you need to have a good understanding of what you can spend. By getting the banker on your team early you will save yourself a lot of time and put yourself in position to get the deals when they are available.
Money talks in real estate transactions and most churches have their cash tied up in their current building. If you plan to move in the next 24 to 36 months you need to get your building on the market now. Get the building sold, don't worry about making your church homeless, lease back arrangements can be made to make the transition to your new church home go smoothly.
Many churches head out to find a building as soon as they first consider a relocation, and then once they have found one try to figure out how they can pay for it. Sellers of both land and buildings usually will not wait long for you to sell your existing church building and arrange a loan. You will be in position to get the best deals if you have all your money in hand, including the equity from your building and any loans you need.
Most lenders do not understand "Church", because the accounting process in a church is more like that of a commercial loan. Many commercial lenders do not understand because most commercial concerns make a profit, most churches do not. Also, a lender to want to be the bank that forecloses on a church, this can only leads to bad public relations. This is another reason it is vitally important to work with church professionals.
I suggest that you speak with several church friendly lenders to determine with whom you can gain a comfort level that you could work with them. This is a relationship that will be with you for a long time, it's worth putting in some work to make the right choice.
Now you have narrowed the field to a small number of lenders that fit you, you are ready to begin the application process. In this process you will learn from the lenders how much they can loan you. That information plus the equity and any campaign funds you have collected will allow you to make offers in confidence. That confidence is important to the sellers you will be working with.
Typically most lenders will want to see that you have 25% - 35% equity in the new property. This is just a guide, although it is seldom less, it could be more. Many churches will run a capital campaign. Some will do it themselves, "in house", others will use professional fund raising companies. In my experience the lenders prefer the professionals for two reasons. One, the professional campaign will usually yield 2 - 3 times the amount of money the "in house" campaign will and secondly the actual amount collected will be higher. Again it is a good idea to speak with a few professional companies to find a good fit for your church.
In summary, pray, plan every move well with the help of church professionals that have successfully completed church projects and can partner with you for a successful relocation for your church. Next time we will discuss some of the financial options available for churches today.
Share This Article
Rating: Not yet rated Next Article - How to Get a Property in Brazil and Previous Article - Tips to Stop Foreclosure Fast
About the Author
Author Bill Travis can asess you with your help churches avoid pitfalls. Pastorcast can be heard live on the second Wednesday of the month at 10:00 a.m. CT.
Comments
No comments posted.Add Comment
Popular Articles about: Real Estate
1: Renter's Rights in New York City2: The Future of the Housing Market
3: Where New York City Apartments Fall in the Global Economy
4: Tenerife Property On The Rise For 2008
5: Buying and Renting in Atlanta
6: Euro Set To Spur 2008 Malta Real Estate
7: Renting and Buying in Boston
8: More Foreign Buyers Increase Demand for New York Real Estate
9: How Can You Make Money Through Real Estate Investing
10: Is the Superfund Capable of Restoring Confidence?
11: Economic Development: Seven Clues to Successful Incubators
12: Real Estate Flipping: Is It Legal?
13: Brief guide to repossession
14: Tips for selling your house
15: Foreclosure rescue and Foreclosure Options
16: Renting and Buying a Home in Dallas
17: Investing in Real Estate
18: Investing in Florida Beach Real Estate
19: Important tips for buying property.
20: Shortage of 3 crore houses in the country.
21: Sandra Apartments Cyprus
22: Cash Buyers And Selling Your Property Fast
23: Why The Mortgage & Banking Industry’s Latest Attempt To Fix The Housing Debacle Will Fail
24: Trials and Tribulations in the New York City Rental Market
25: Why Buy A Short Sale?
26: Buying A Home, The Best Investment You Can Make
27: Problems In Rented Houses
28: making real estate investing work-when you're married
29: Learn How A Website Can Help Your Real Estate Investing Business
30: Buying Properties - 5 Most Common Mistakes of An Unprepared Buyer