Should I have my contractor buy material?

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Should I have my contractor buy material?

Daimyan Hutchison
Rental Property Investor · IL · Member since 2020 · 10 posts · 0 votes

I'm debating whether or not I should let my contractor buy the materials for the job. What do you guys recommend I should do to go about this the right way?

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
5y

Depends on the material and depends on the job.

Pros: 

1. It's easy to determine labor costs for the job.

2. You can be sure that the material is going to your job and not some other job.

3. You can pick out specific material when necessary.

Cons:

1. You might buy the wrong thing or too much/too little.

2. You may not get the pricing a contractor can get, or be able to buy from places contractors can buy.

3. It absolves the contractor of any responsibility when it comes to material quality, appropriate, etc.

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    5y

    Depends on the material and depends on the job.

    Pros: 

    1. It's easy to determine labor costs for the job.

    2. You can be sure that the material is going to your job and not some other job.

    3. You can pick out specific material when necessary.

    Cons:

    1. You might buy the wrong thing or too much/too little.

    2. You may not get the pricing a contractor can get, or be able to buy from places contractors can buy.

    3. It absolves the contractor of any responsibility when it comes to material quality, appropriate, etc.

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  • Jennie Berger
    Lender · Chicago IL · Member since 2020 · 357 posts · 227 votes
    5y

    Hey @Daimyan: 

    Great question that really depends on how involved/hands on you want to be in your project. 

    1. What type of project is it? 

    2. How experienced are you with these types of projects and sourcing materials? 

    Might be good to know these things before making any recommendations. Various material prices have increased over the last 6 months or so, as you may well know. So it can definitely behoove you--and save some dough--to buy your own. However, it can also be a total hassle to take this on if it's not something you're very comfortable with and have good resources for. 

    I would add that it also depends on your timeline & budget for the project. Materials can be back ordered and having a seasoned quality contractor order them for you may enable you to get the project completed in a more timely manner. 

    Jennie Berger

    Property People

    2Reply
  • Kyle Keller
    Realtor · Honolulu, HI · Member since 2018 · 255 posts · 118 votes
    5y

    @Daimyan Hutchison

    I agree with JD, I have done both ways. Certain things like plumbing and electric, the contractor is going to have a much better idea of what you need to get saving you A LOT of time trying to find the right parts.

    If it's asthetics you're going for, you may want to go and pick out the material to make sure you like the final look. I have had my contractor go to pick up the material after I picked out and paid for it too.

    Either way, always get the receipts!

    3Reply
  • Frank S.
    Specialist · Chicago, IL · Member since 2015 · 870 posts · 345 votes
    5y
    Originally posted by @Daimyan Hutchison:

    I'm debating whether or not I should let my contractor buy the materials for the job. What do you guys recommend I should do to go about this the right way?

     Yeah, let them do it. It's a pain to go to the store and handle returns.   Develop specifications as part of your contract, this way they can't give you cheap junk. Quality of paint, floors, windows, hardware, fixtures, etc.   Be prepared to accept equals in case of long lead times. 

    2Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    5y

    I should add that for novices it's generally better to let the contractor get the material. They usually can get quantity discounts so you don't save anything. I often get materials on our jobs but we have contractor accounts and can save time & money by having everything ready for when our subs show up. 

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  • Brandon Green
    Member since 2019 · 4 posts · 1 vote
    5y

    New contractor...HELL NO! Contractor that you have done work with and is doing a renovation similar to what you usually do...HELL YES! 

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  • Pat L.
    Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    5y

    We buy our own ALWAYS.

    1Reply
  • Bill F.
    Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
    5y

    If you can't trust the contractor to buy the materials and/or have them put in the features you want, why are you hiring them? 

    8Reply
  • Mark F.Pro Member
    Rental Property Investor · Elgin, IL · Member since 2016 · 326 posts · 270 votes
    5y

    Both? I give my contactor one of my Home Depot/Menards commercial credit cards to get what they need. Then I can track what is purchased and they get my contractor account discount plus I get free gas from HD and the contractor doesn't have to front the money for materials and gets paid for the labor. I find the contracts I have worked with like this as well. 

    1Reply
  • Cody Neumann
    Rental Property Investor · Surprise, AZ · Member since 2020 · 405 posts · 179 votes
    5y

    @Daimyan Hutchison

    Depending on the situation you could put cost of materials on a credit card and get cash back on it if you pay them off right away and spend responsibly. Just another way to maximize profit. There are also credit cards you could use that have sign up bonuses

    1Reply
  • Waylon Zook
    Etna Green, IN · Member since 2015 · 207 posts · 157 votes
    5y

    @Bill F. Such a great question !

    1Reply
  • David Doughty
    Homeowner · Vancouver Island BC, Canada · Member since 2021 · 2 posts · 3 votes
    5y

    @Daimyan Hutchison

    First off I'm a contractor

    Ask them for a list of materials and go buy them yourself.

    Get a contractors account at the construction supply store of your choosing. The more material you buy the better your discount gets.

    When your contractor gets a discount, they don't pass the savings on to you, they mark it up, and rightly so because they had to take the time to go pick it out and load it up, and we expect to get paid for our time.

    So ya, if you have the time and a truck (and sometimes trailer) to do it yourself, do it, or get it delivered for like $75.

    3Reply
  • Jimmy Chao
    Investor · Los Angeles, CA · Member since 2019 · 132 posts · 91 votes
    5y

    For major rehab I specify quality and let the contractor be responsible for materials. For minor stuff I might order it myself. My rationale is that if there's a problem with the materials, it is the contractor's problem as he/she/they were responsible for getting the material. I have seen a lot of projects that went off the rails with finger pointing when the HO tries to middle-man the material in an attempt to save money.

    Exception to this might be one-off stuff or things I was really picky about, or that I have existing relationships with good quality suppliers.

    1Reply
  • Waleep Alvi
    Investor · Oakland, CA · Member since 2020 · 108 posts · 89 votes
    5y

    I let the GC take care of all construction material. Mostly it is because I don't want to hold up the job and I don't want to have to go to the store and/or haul material. That's not to say that sometimes I don't swing by a Home Depot and say to the GC "hey, need anything while I am there?" and end up picking up odds and ends. In that case I keep the receipts and periodically give him an update on what the total spent is so that he knows to deduct it from our price for that portion of the work.

    2Reply
  • Anthony Barnard
    Rental Property Investor · Terre Haute, IN · Member since 2019 · 8 posts · 6 votes
    5y

    I don't think there is a right or wrong answer here. I work for a GC and we usually get the materials. There are occasions when it simply easier to have the customer pick it, but mostly when it's a specific item that they still have to make a choice on. I will say that we charge a mark for the material because we're spending the time and effort to get it and taking full responsibility for the material.

    If comes down to cost or trust, buy it yourself. If you don't have huge concerns in those areas, just let the contractor do it.

    2Reply
  • Zach UptonPro Member
    Contractor · Bridgeport, CT · Member since 2015 · 10 posts · 7 votes
    5y

    @Daimyan Hutchison

    Hi Daimyan I’m a contractor and I always buy the building materials like drywall, lumber, etc. There’s just no way you’d know the hundreds of different random little items that go into a basic project. On the flip side I have my client buy any of the finishing touches known as allowance items because there’s no way I’d be able to know exactly what style you want. These allowance items include tile, vanity, light fixtures, etc. There is a large price range with these items, you could buy a $300 vanity from Home Depot or you could buy a $3000 custom one so it’s difficult to guess where on that scale the customer is. But your contractor should be able to accurately estimate the costs of the building materials for the job.

    1Reply
  • Nick Rutkowski
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    5y

    @Daimyan Hutchison

    I do a mix for my customers. I have them buy the specific finishing materials like tile, paint color, moulding, etc. The fun things customers like to buy. Then I buy the other materials like electrical parts, drywall, plumbing parts, hardware.

    Give them the receipts and they reimburse me.

    1Reply
  • Lisa Piedade
    Member since 2021 · 1 post · 1 vote
    5y

    @Daimyan Hutchison

    Usually many contractors l get a commissions or they mark it up on your expense.

    1. You can ask them if they get discounts if they will extend it to you? Find out retail prices through their vendors prior to finishing out their price.

    2. If you purchase yourself. Would contractor still arrange for delivery of goods?

    Some vendors on large orders will offer you discounts even without going through contractor.

    Sometimes contractors charge you less if they are making it other ways.

    Some contractors order more then needed to get money on credits on their returns. Not as common

    If you are purchasing

    Keep spread sheet if you need more buy a little extra to be on safe side.

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    5y

    @Daimyan Hutchison no you pay for it on your CC ,( my card is on file at HD, Text to confirm  ) get all the points free trips are good :) .  I always just get labor pricing as I know what the materials will cost 

    1Reply
  • Andrew Flora
    Rental Property Investor · North Vernon, IN · Member since 2018 · 136 posts · 192 votes
    5y

    I pick the tile they pick the mortar

    I pick the color they pick the paint

    I pick the faucet they pick the supply lines

    You get the point....  I try to let them pick as much as possible because they prefer working with certain types or brands of materials and it helps them do they job the way they are best at doing it.  I pick most of the aesthetic materials or things that are more noticeable and have more to do with the design.  Most of my contractors know what look I like and I can give them more freedom the others I have to buy more of the material for them but I always consult with them to see what materials they prefer to use and then I fit my design to that.  I also ask them to save the receipts for any material they buy and I reimburse that and they invoice me for labor.  I do this to avoid a contractor charging a 20% surcharge on materials he paid retail price for at home depot.

    2Reply
  • Dave PoeppelmeierBusiness Member
    Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes
    5y

    It all depends in how much you trust your contractor. If it's someone new and I'm familiar with what they will need, I will try to get the material. But, I'm super busy and don't have a truck (I've had more than one person tell me in the Home Depot loading area "Son, you need a truck!") so I'm willing to pay for the convenience of having my contractors get the material that they know and need. I have a great Roofer but he insists I get everything he needs. I am not a roofer and have no idea what he needs despite having a list, and last time it was a disaster and I wasted so much money in truck fees to deliver and return said wrong materials. I love the idea of giving someone a Commercial Home Depot card, or Home Depot can do Phone Sales where they can call you and you can give your Pro phone # and a CC. 

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  • Ken Naim
    Investor · Lake Worth, FL · Member since 2016 · 233 posts · 140 votes
    5y

    @Daimyan Hutchison Buy the big items, cabinets, flooring, appliances, paint, tub, toilet etc. Let yhe contractors buy the small items, lumber, caulk, tile adhesive, baseboards, plumbing materials, drywall etc. This allows you to pick the high ticket items you like without markup and let the contractor choose the materials they work best with which saves time/cost.

    0Reply
  • Account Closed
    Contractor · Mickleton, NJ · Member since 2020 · 114 posts · 112 votes
    5y

    @David Doughty 100% agree

    1Reply
  • Troy Halsey
    Contractor · spring lake North Carolina · Member since 2020 · 26 posts · 10 votes
    5y

    @Daimyan Hutchison depending I believe on how busy your schedule and if this is a new contractor which don’t have a past working relationship. If It don’t save you money and uses your time when you could have been doing something else I would have the contractor to give me a itemized list and check the list. Also can get several contractors quote and get a gauge on material cost from different contractors make sure it’s all ballpark range then make a decision.

    1Reply
  • David Beckley
    Investor · Saint Louis, MO · Member since 2015 · 204 posts · 37 votes
    5y

    @Daimyan Hutchison some good advice here. It's better for me when my contractor buys the material, but I always want to see a breakdown, separating labor costs and material costs.

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