Purchasing Material For Contractors
Flipper/Rehabber · Knoxville, TN · Member since 2023 · 47 posts · 20 votes
I found a contractor I like to rehab a house I bought. Is it best for the investor to always purchase the material? I am assuming the answer is "yes" to get credit card points and prevent a contractor from charging a premium on materials. Please let me know what you do when it comes to buying materials for a flip.
I found a contractor I like to rehab a house I bought. Is it best for the investor to always purchase the material? I am assuming the answer is "yes" to get credit card points and prevent a contractor from charging a premium on materials. Please let me know what you do when it comes to buying materials for a flip.
It's not necessarily the way to go, depends on the property and your contractor. The most important thing is to work with a contractor you trust 100%. I know my contractor marks some of his materials up and I couldn't care less, because he's honest about it and I WANT him to profit off of my deals and return my calls when I need him.
I've found MOST quality contractors wont' use the materials you've bought because MOST newer isnvestors will buy the cheapest pieces and parts they can find, often providing used materials and then the expect the contractor to guaratee their work. I wouldn't do that- I'm sure most people in that situation wouldn't either. In most cases, a contractor wants to provide their own materials, not because they want to rip you off, but because they know that if they use quality materials that they are familiar with, they can provide you with a reasonable guarantee.
There are always exceptions, but don't make the assumption that a contractor who will only provide their own materials is trying to rip you off, it might be a sign that they have pride and want to stand by their work.
I am a licensed contractor and deal with this all the time. I would also recommend getting Greene’s book long distance investing because he hits on this as well.
I have no problem if an investor wants to buy material and have it delivered. When that delivery is late or short though I am sure to contact them saying “hey the drop came and we are missing material, was it ordered or miss at the box store?” It maybe a good idea to get it delivered the first couple of times when working with a new sub contractor to feel them out or save money. However, if you do not have experience and know what you need - leave it up the pros. The time for me to go to Lowe’s or Home Depot to get truss hangers and nails because the investor only got wall studs and roof truss is still a costly mistake when you look at drive time. I always say this, if you break down your cost per hour to maximize your return, I do the same thing. $275 hour to drive back and forth to Lowe’s because you forgot to order something will cost you instead of just letting me get it. Then if I make a mistake it’s on me. Not you. Especially when hard money lending is on a time crunch, every hour counts.
Well, if he is a contractor worth a damn he/she should get materials cheaper than you. They should have a 10% discount at a Home Depot or Lowes. Every contractor I know has that deal.
But you will need to front money to get the job going.
I think there was only one place where we needed a contractor's license to purchase, so we used our contractor's number, but we paid for the materials.
Just saw this....although that may not be illegal in some states it is certainly un-ethical IMHO
Since the person does not have the legal right to resell materials and avoided paying state sales tax, it's fraud. They probably used someone else's license number which also would be fraud.
Yep, I knew it was fraud in Cali where I used to build...wasn't sure where the OP was from. But it's still wrong...
She's in Oregon- it's a crime there and in Ohio. Could lose Canadian VISA, sure hope that's not her real name.
Why are people always trying to save a couple bucks? It just ain't worth it. Do things right....sigh.
No-no Bruce, we gotta talk to these people like a 3rd grade classroom because they THINK there saving $, because there using arrogance and assumption for there knowledge base.
They don't know, don't look to know, or use reason, to figure out that a good LEGIT Contractor has worked there way UP the supply chain over the years, has NON-public supplier account's, NON-public volume based pricing, NON-public manufacturer direct supply and pricing, all at SIGNIFICANT discount vs big-box store.
Notice the common theme. They think we all shop at Home Depot and Lowes for everything, lol!
For those NOT in the know, here is the REALITY check of it.
My windows came DIRECTLY from manufacturer. As in YES, I had a special log-in, I would create order ticket, and it would go to production floor. A semi arrived weekly at my shop to drop off orders that came from the plant. No middle anything.
My doors, also came directly from manufacturing plant.
Most of my trim work, came from a manufacturing plant. I had 2 suppliers for such, 1 who even did pre-stain and paint.
My fasteners came from the supplier who supplies HD/Lowes.
My paint account was with BEAR, and serviced by HD. I did NOT pay the price marked on shelves.
My siding came from Georgia Pacific.
My roofing was via GAF and Owens Corning, serviced by certain lumber yards and for big orders I could order line-time AT the production plant.
My customers who paid MY prices WITH my markups, with MY running of everything probably paid significantly less than you do AFTER considering your "points" and discount's at the big box stores.
AND, for the items we did get at HD, I had a corporate account and weekly everything was ran through on purchases for my corporate pricing that in-store associates, even pro-desk, has no access to other than seeing what corporate sent them for my invoice.
It's a FANTASY, a mirage thinking you a RETAIL customer will ever match, more or less beat, what I the professional buying millions annually in volume get from the manufacturers.
This fantasy is like thinking you will ever get better cost on items than Walmart, it's a childish concept.
So the ONLY GC's you will ever get to make this work with, are the GC's who are too small, too new, too green, too novice, to have earned the PROPER logistical system and account's to have obtained Manufacturer/Supplier direct pricing.
And it's in the contract's that NO, a customer can NOT ever pay direct, AND that the GC can not even tell people what the pricing is that we get. At risk of loosing our account and/or being sued for leaking such info. Not to mention I didn't pay at time of order, that's how legit account's work, net 30 too net 90. meaning I get an invoice monthly or quarterly that we than remit payment to.
My window and door products ARE sold at Home Depot. My price was not some paltry 10%/15% discount, it was a multiplier. We not talking knock-off product's, this IS how the entire industry operates. Even Pella having there own store front's, I had account with Pella and I could price compete with Pella stores themself, think on that nugget a bit.
So THINK your coming ahead spending all kinds of time and monkey-business trying to do half the GC's work. OR, get smart, focus on what IS effective, and try to get with a GC who has some of the best direct supply account's and pricing, and negotiate to get the best discount from them they can lend. Probably beating what your in-theory discount would be and with none of the risk and work involved running material supply logistics.
Or, ya know, ignore reality and keep on with the fantasy because it feels better. As feelings over fact's seem to be the theme of 2020's.
@James Hamling Should be required reading for all customers thinking of doing a remodel or new build. At the risk of beating a dead horse, I just cannot comprehend what people think. Like you, I ordered mostly custom windows and doors through companies like Nana Wall, Anderson, Fleetwood, Etc. I went directly to their warehouses. And sat down with my own personal Rep. And paid 1/2 what a customer would pay. Plus got tickets to the ballgame and dinner :-)
I think there was only one place where we needed a contractor's license to purchase, so we used our contractor's number, but we paid for the materials.
Just saw this....although that may not be illegal in some states it is certainly un-ethical IMHO
Since the person does not have the legal right to resell materials and avoided paying state sales tax, it's fraud. They probably used someone else's license number which also would be fraud.
Yep, I knew it was fraud in Cali where I used to build...wasn't sure where the OP was from. But it's still wrong...
She's in Oregon- it's a crime there and in Ohio. Could lose Canadian VISA, sure hope that's not her real name.
Why are people always trying to save a couple bucks? It just ain't worth it. Do things right....sigh.
No-no Bruce, we gotta talk to these people like a 3rd grade classroom because they THINK there saving $, because there using arrogance and assumption for there knowledge base.
They don't know, don't look to know, or use reason, to figure out that a good LEGIT Contractor has worked there way UP the supply chain over the years, has NON-public supplier account's, NON-public volume based pricing, NON-public manufacturer direct supply and pricing, all at SIGNIFICANT discount vs big-box store.
Notice the common theme. They think we all shop at Home Depot and Lowes for everything, lol!
For those NOT in the know, here is the REALITY check of it.
My windows came DIRECTLY from manufacturer. As in YES, I had a special log-in, I would create order ticket, and it would go to production floor. A semi arrived weekly at my shop to drop off orders that came from the plant. No middle anything.
My doors, also came directly from manufacturing plant.
Most of my trim work, came from a manufacturing plant. I had 2 suppliers for such, 1 who even did pre-stain and paint.
My fasteners came from the supplier who supplies HD/Lowes.
My paint account was with BEAR, and serviced by HD. I did NOT pay the price marked on shelves.
My siding came from Georgia Pacific.
My roofing was via GAF and Owens Corning, serviced by certain lumber yards and for big orders I could order line-time AT the production plant.
My customers who paid MY prices WITH my markups, with MY running of everything probably paid significantly less than you do AFTER considering your "points" and discount's at the big box stores.
AND, for the items we did get at HD, I had a corporate account and weekly everything was ran through on purchases for my corporate pricing that in-store associates, even pro-desk, has no access to other than seeing what corporate sent them for my invoice.
It's a FANTASY, a mirage thinking you a RETAIL customer will ever match, more or less beat, what I the professional buying millions annually in volume get from the manufacturers.
This fantasy is like thinking you will ever get better cost on items than Walmart, it's a childish concept.
So the ONLY GC's you will ever get to make this work with, are the GC's who are too small, too new, too green, too novice, to have earned the PROPER logistical system and account's to have obtained Manufacturer/Supplier direct pricing.
And it's in the contract's that NO, a customer can NOT ever pay direct, AND that the GC can not even tell people what the pricing is that we get. At risk of loosing our account and/or being sued for leaking such info. Not to mention I didn't pay at time of order, that's how legit account's work, net 30 too net 90. meaning I get an invoice monthly or quarterly that we than remit payment to.
My window and door products ARE sold at Home Depot. My price was not some paltry 10%/15% discount, it was a multiplier. We not talking knock-off product's, this IS how the entire industry operates. Even Pella having there own store front's, I had account with Pella and I could price compete with Pella stores themself, think on that nugget a bit.
So THINK your coming ahead spending all kinds of time and monkey-business trying to do half the GC's work. OR, get smart, focus on what IS effective, and try to get with a GC who has some of the best direct supply account's and pricing, and negotiate to get the best discount from them they can lend. Probably beating what your in-theory discount would be and with none of the risk and work involved running material supply logistics.
Or, ya know, ignore reality and keep on with the fantasy because it feels better. As feelings over fact's seem to be the theme of 2020's.
Thank you so much for writing this out! FWIW my distributors provide net 90 billing, ongoing education & full OEM warranty. They pay my labor when product fails. That's how I'm able to comply with the CSLB's requirements.
just like another poster said, tripping over nickels to pick up pennies.
to wit: its not legal to do a time n materials contract on residential properties. Only a written flat bid. Down payment 10% or $1,000.00 whichever is less. 3 day cooling of period & 5 day for people over 65 & many other laws spelled out in the business & professions laws that we test on and signed an affidavit to uphold.
People on the forum dismiss these and many other facts relative to contractor license law at their own peril.
If I took a residential customers credit card & bought material I'd be in direct violation of license law. The registrar would revoke my license, attach my bond, I'd be found guilty of misdemeanor with fines and possibly jail.
For clarity to all, here is the "general" chain of how the items your buying at Home Depot / Lowes get there.
A Manufacturer makes the product.
A sales agency retained by manufacturer sell's (B2B) for the manufacturer. Selling to either Regional Supplier OR a Wholesaler.
If wholesaler applies, they generally fit in here, but at times can be below Regional Supplier. And they sell (B2B) too....
Regional Supplier, who look's a lot like a lumber yard but is closed to the public, sells (B2B) to in-market Distributors.
The in-market Distributor may be a lumber yard that's open to the public. This is the 1st time B2C comes a potential.
Your Home Depot / Lowe's finally sells to you (B2C).
So what you buy at H.D./Lowes goes through how many hand's? The people taking a profit margin are: Manufacturer, sales agency, wholesaler, supplier, distributor, and finally the big box store.
Do the math. Let's say each does only a 20% markup, let's start with $100.00
Manufacturer need's $100, so sales agency sells at $120, wholesaler sells at $144, supplier sells at $172.80, distributor sells at $207.36 and your big-box store sells to you at $248.83
Which saves more $, trying to pay at box-store or getting with someone higher up the feeding chain?
For clarity to all, here is the "general" chain of how the items your buying at Home Depot / Lowes get there.
A Manufacturer makes the product.
A sales agency retained by manufacturer sell's (B2B) for the manufacturer. Selling to either Regional Supplier OR a Wholesaler.
If wholesaler applies, they generally fit in here, but at times can be below Regional Supplier. And they sell (B2B) too....
Regional Supplier, who look's a lot like a lumber yard but is closed to the public, sells (B2B) to in-market Distributors.
The in-market Distributor may be a lumber yard that's open to the public. This is the 1st time B2C comes a potential.
Your Home Depot / Lowe's finally sells to you (B2C).
So what you buy at H.D./Lowes goes through how many hand's? The people taking a profit margin are: Manufacturer, sales agency, wholesaler, supplier, distributor, and finally the big box store.
Do the math. Let's say each does only a 20% markup, let's start with $100.00
Manufacturer need's $100, so sales agency sells at $120, wholesaler sells at $144, supplier sells at $172.80, distributor sells at $207.36 and your big-box store sells to you at $248.83
Which saves more $, trying to pay at box-store or getting with someone higher up the feeding chain?
So much junk at retailers from the Chinese drywall debacle, non UL listed materials, warped lumber.
Plus my trucks broken into in parking lot. Home owners and handyman wanting advice on how to do code illegal work.
Amazon & box stores are low margin high volume mass marketers.
But like moths to a flame the consumer mindset is easily duped
For anyone still paying attention to this thread; legitimate business people don't buy retail, they buy wholesale.
I thought "savy" investors looked for wholesale deals?
and ensures no markup from the contractor.
So you expect no markup from the Contractor on materials? Zero? Even though they will spend a good deal of time picking up, handling, managing, securing and otherwise being responsible for your materials?
Well, just know that there will always be a markup on materials. You can either be up-front with your Contractor about it and know the exact amount of markup..., or just know that they will bury the materials markup in their other costs somewhere and wonder how much you actually paid to have them manage your materials....Yes LOL
For clarity to all, here is the "general" chain of how the items your buying at Home Depot / Lowes get there.
A Manufacturer makes the product.
A sales agency retained by manufacturer sell's (B2B) for the manufacturer. Selling to either Regional Supplier OR a Wholesaler.
If wholesaler applies, they generally fit in here, but at times can be below Regional Supplier. And they sell (B2B) too....
Regional Supplier, who look's a lot like a lumber yard but is closed to the public, sells (B2B) to in-market Distributors.
The in-market Distributor may be a lumber yard that's open to the public. This is the 1st time B2C comes a potential.
Your Home Depot / Lowe's finally sells to you (B2C).
So what you buy at H.D./Lowes goes through how many hand's? The people taking a profit margin are: Manufacturer, sales agency, wholesaler, supplier, distributor, and finally the big box store.
Do the math. Let's say each does only a 20% markup, let's start with $100.00
Manufacturer need's $100, so sales agency sells at $120, wholesaler sells at $144, supplier sells at $172.80, distributor sells at $207.36 and your big-box store sells to you at $248.83
Which saves more $, trying to pay at box-store or getting with someone higher up the feeding chain?
So much junk at retailers from the Chinese drywall debacle, non UL listed materials, warped lumber.
Plus my trucks broken into in parking lot. Home owners and handyman wanting advice on how to do code illegal work.
Amazon & box stores are low margin high volume mass marketers.
But like moths to a flame the consumer mindset is easily duped
For anyone still paying attention to this thread; legitimate business people don't buy retail, they buy wholesale.
I thought "savy" investors looked for wholesale deals?
Where do you buy your stuff if not in Homedepot ???
My contractor lists what he’s providing vs what I’m providing in my contract. For example,in my kitchen renovation, the cost of the countertop was included in his quote but the knobs/pulls were something I needed to provide.
i actually trust my contractor and I find that if I want a specific product, I’ll let him know (example custom tile) and he’s fine with it. Depending on what it is, I can order or if he has a connection, he will. However, most of the time he has the connection and discount and knows where to steer me. In the case of the countertop, he had an amazing fabricator who had a list of 3 warehouses for me to visit and choose the slab I wanted. Unless it was grossly expensive/ custom, the material was included in the overall quote.
For a recent renovation, I specified exactly what floors I wanted and he gave me a separate quote for the floors plus install. When pricing against a local floor store, his price was better.
For clarity to all, here is the "general" chain of how the items your buying at Home Depot / Lowes get there.
A Manufacturer makes the product.
A sales agency retained by manufacturer sell's (B2B) for the manufacturer. Selling to either Regional Supplier OR a Wholesaler.
If wholesaler applies, they generally fit in here, but at times can be below Regional Supplier. And they sell (B2B) too....
Regional Supplier, who look's a lot like a lumber yard but is closed to the public, sells (B2B) to in-market Distributors.
The in-market Distributor may be a lumber yard that's open to the public. This is the 1st time B2C comes a potential.
Your Home Depot / Lowe's finally sells to you (B2C).
So what you buy at H.D./Lowes goes through how many hand's? The people taking a profit margin are: Manufacturer, sales agency, wholesaler, supplier, distributor, and finally the big box store.
Do the math. Let's say each does only a 20% markup, let's start with $100.00
Manufacturer need's $100, so sales agency sells at $120, wholesaler sells at $144, supplier sells at $172.80, distributor sells at $207.36 and your big-box store sells to you at $248.83
Which saves more $, trying to pay at box-store or getting with someone higher up the feeding chain?
So much junk at retailers from the Chinese drywall debacle, non UL listed materials, warped lumber.
Plus my trucks broken into in parking lot. Home owners and handyman wanting advice on how to do code illegal work.
Amazon & box stores are low margin high volume mass marketers.
But like moths to a flame the consumer mindset is easily duped
For anyone still paying attention to this thread; legitimate business people don't buy retail, they buy wholesale.
I thought "savy" investors looked for wholesale deals?
Where do you buy your stuff if not in Homedepot ???
In the bay area; Pine cone lumber, economy lumber, lumber liquidators, herning underground, conliff plumbing,bedrosians marble, consolidated electrical, edges electrical, o'hare plumbing,ewing irrigation, aaron overhead door, mintons door, stucco supply co, whitecap, aydins window, savin windows and those are just a few I can think off. Some are the same in Sacramento some are different. My flipping territory is a triangle from Tahoe to santa rosa to Monterey.
For clarity to all, here is the "general" chain of how the items your buying at Home Depot / Lowes get there.
A Manufacturer makes the product.
A sales agency retained by manufacturer sell's (B2B) for the manufacturer. Selling to either Regional Supplier OR a Wholesaler.
If wholesaler applies, they generally fit in here, but at times can be below Regional Supplier. And they sell (B2B) too....
Regional Supplier, who look's a lot like a lumber yard but is closed to the public, sells (B2B) to in-market Distributors.
The in-market Distributor may be a lumber yard that's open to the public. This is the 1st time B2C comes a potential.
Your Home Depot / Lowe's finally sells to you (B2C).
So what you buy at H.D./Lowes goes through how many hand's? The people taking a profit margin are: Manufacturer, sales agency, wholesaler, supplier, distributor, and finally the big box store.
Do the math. Let's say each does only a 20% markup, let's start with $100.00
Manufacturer need's $100, so sales agency sells at $120, wholesaler sells at $144, supplier sells at $172.80, distributor sells at $207.36 and your big-box store sells to you at $248.83
Which saves more $, trying to pay at box-store or getting with someone higher up the feeding chain?
So much junk at retailers from the Chinese drywall debacle, non UL listed materials, warped lumber.
Plus my trucks broken into in parking lot. Home owners and handyman wanting advice on how to do code illegal work.
Amazon & box stores are low margin high volume mass marketers.
But like moths to a flame the consumer mindset is easily duped
For anyone still paying attention to this thread; legitimate business people don't buy retail, they buy wholesale.
I thought "savy" investors looked for wholesale deals?
Where do you buy your stuff if not in Homedepot ???
In the bay area; Pine cone lumber, economy lumber, lumber liquidators, herning underground, conliff plumbing,bedrosians marble, consolidated electrical, edges electrical, o'hare plumbing,ewing irrigation, aaron overhead door, mintons door, stucco supply co, whitecap, aydins window, savin windows and those are just a few I can think off. Some are the same in Sacramento some are different. My flipping territory is a triangle from Tahoe to santa rosa to Monterey.
You all know contractors have been building long before box stores showe up righ?
Guess who built the box stores? Contractors & with material that DID NOT come from a box store.
Guess who built the apple space ship? The home you all are living in, hell even the bay bridge.....contractors
You know who flipped before it became a trendy buzzword? Contractors.
Except we called it " buying a beat up hose & selling it for a profit"
HGTV and GURUS couldn't make it sound trendy though ROFLMAO
For clarity to all, here is the "general" chain of how the items your buying at Home Depot / Lowes get there.
A Manufacturer makes the product.
A sales agency retained by manufacturer sell's (B2B) for the manufacturer. Selling to either Regional Supplier OR a Wholesaler.
If wholesaler applies, they generally fit in here, but at times can be below Regional Supplier. And they sell (B2B) too....
Regional Supplier, who look's a lot like a lumber yard but is closed to the public, sells (B2B) to in-market Distributors.
The in-market Distributor may be a lumber yard that's open to the public. This is the 1st time B2C comes a potential.
Your Home Depot / Lowe's finally sells to you (B2C).
So what you buy at H.D./Lowes goes through how many hand's? The people taking a profit margin are: Manufacturer, sales agency, wholesaler, supplier, distributor, and finally the big box store.
Do the math. Let's say each does only a 20% markup, let's start with $100.00
Manufacturer need's $100, so sales agency sells at $120, wholesaler sells at $144, supplier sells at $172.80, distributor sells at $207.36 and your big-box store sells to you at $248.83
Which saves more $, trying to pay at box-store or getting with someone higher up the feeding chain?
So much junk at retailers from the Chinese drywall debacle, non UL listed materials, warped lumber.
Plus my trucks broken into in parking lot. Home owners and handyman wanting advice on how to do code illegal work.
Amazon & box stores are low margin high volume mass marketers.
But like moths to a flame the consumer mindset is easily duped
For anyone still paying attention to this thread; legitimate business people don't buy retail, they buy wholesale.
I thought "savy" investors looked for wholesale deals?
Where do you buy your stuff if not in Homedepot ???
In the bay area; Pine cone lumber, economy lumber, lumber liquidators, herning underground, conliff plumbing,bedrosians marble, consolidated electrical, edges electrical, o'hare plumbing,ewing irrigation, aaron overhead door, mintons door, stucco supply co, whitecap, aydins window, savin windows and those are just a few I can think off. Some are the same in Sacramento some are different. My flipping territory is a triangle from Tahoe to santa rosa to Monterey.
You all know contractors have been building long before box stores showe up righ?
Guess who built the box stores? Contractors & with material that DID NOT come from a box store.
Guess who built the apple space ship? The home you all are living in, hell even the bay bridge.....contractors
You know who flipped before it became a trendy buzzword? Contractors.
Except we called it " buying a beat up hose & selling it for a profit"
HGTV and GURUS couldn't make it sound trendy though ROFLMAO
More fun facts; The oldest contractor licensing body in the United States is the California License Board founded in 1929.
Contractors are called contractors because we write Contracts. Wild huh
It completely depends on the project.
For example, I tend to purchase the finishes (flooring, tile, lights, etc.) and my contractors include the rest (drywall, lumber, electrical, etc.). What I don't want is to pay for waste. Plus if they pay for it, in theory they lock in the bid and it is on them to cover the difference (of course change orders can exist).
and ensures no markup from the contractor.
So you expect no markup from the Contractor on materials? Zero? Even though they will spend a good deal of time picking up, handling, managing, securing and otherwise being responsible for your materials?
Well, just know that there will always be a markup on materials. You can either be up-front with your Contractor about it and know the exact amount of markup..., or just know that they will bury the materials markup in their other costs somewhere and wonder how much you actually paid to have them manage your materials....Hi Bruce,
Why would a contractor markup materials that you bid out and purchased yourself. You can manage projects multiple ways, including hours + materials. In fact I am managing $500k project now where I am bidding out materials purchasing through the supply house.
I found a contractor I would like to rehab a house I bought. Is it best for the investor to always purchase the material? I am assuming the answer is "yes" to get credit card points and prevent a contractor from charging a premium on materials. Please let me know what you do when it comes to buying materials for a flip.
I have done it both ways, and it has worked out. What I will say is if you are buying materials for a job, never, and I mean NEVER, let the contractor be waiting on you. If you insist on buying the materials and then don't have everything they need, that is a surefire way to sour the relationship.
Also, if you are insisting on a certain product because of your specs, like a certain brand of paint, I suggest you only go that route if the product you want is of superior quality to that of that contractor's base product. I purchased my own paint for a project, but I bought great stuff, and the painters thanked me and complimented my choice. I wouldn't set your contractors up for more work than necessary, as the labor will likely end up costing you more than good material.
The bottom line is each contractor and investor is different. I would feel a lot more comfortable buying material if I am acting as the GC and closely overseeing the project; however, if I'm only going to be at the property once a week or less, I would likely get a quote for the finished product and let the contractor do the work of sourcing material.
Why would a contractor markup materials that you bid out and purchased yourself. You can manage projects multiple ways, including hours + materials. In fact I am managing $500k project now where I am bidding out materials purchasing through the supply house.
If you, the customer.... purchase the material, pick it up, load and unload it, make it safe in your project house, deal with any shortages, overages or returns, take on all warranty issues, etc, etc, then I suppose you could justify not paying the GC any markup.
But then I as a GC would never work for you, and any sane customer wants guys like me working for them. It's not because of the money, that's not what this is about really, I need to have absolute control over every aspect of the project to ensure it comes in on time and on budget.
Make sense?
Why would a contractor markup materials that you bid out and purchased yourself. You can manage projects multiple ways, including hours + materials. In fact I am managing $500k project now where I am bidding out materials purchasing through the supply house.
If you, the customer.... purchase the material, pick it up, load and unload it, make it safe in your project house, deal with any shortages, overages or returns, take on all warranty issues, etc, etc, then I suppose you could justify not paying the GC any markup.
But then I as a GC would never work for you, and any sane customer wants guys like me working for them. It's not because of the money, that's not what this is about really, I need to have absolute control over every aspect of the project to ensure it comes in on time and on budget.
Make sense?
Hi Bruce,
I agree with you. In that case we wouldn't be working with you as I would be the acting GC. In many instances - It makes more sense for you to be the GC on your own project, which is what I was pointing out above. It's much different hiring a GC, or hiring a sub.
Why would a contractor markup materials that you bid out and purchased yourself. You can manage projects multiple ways, including hours + materials. In fact I am managing $500k project now where I am bidding out materials purchasing through the supply house.
If you, the customer.... purchase the material, pick it up, load and unload it, make it safe in your project house, deal with any shortages, overages or returns, take on all warranty issues, etc, etc, then I suppose you could justify not paying the GC any markup.
But then I as a GC would never work for you, and any sane customer wants guys like me working for them. It's not because of the money, that's not what this is about really, I need to have absolute control over every aspect of the project to ensure it comes in on time and on budget.
Make sense?
Hi Bruce,
I agree with you. In that case we wouldn't be working with you as I would be the acting GC. In many instances - It makes more sense for you to be the GC on your own project, which is what I was pointing out above. It's much different hiring a GC, or hiring a sub.
Ah, ok, gotcha. Yes if you're working as an Owner/Builder (assuming that is allowed on non-owner properties in your State) then of course you'd want to buy your own stuff. This thread though, is about a typical relationship where the Homeowner/Investor hires a GC to run the whole job and then tries to insert themselves in the materials loop.
@Patrick Goswitz
I like to have the contractor pick up small things like screws and tubes of caulk etc but I pick up the majority of the materials because I know exactly what I want and I feel it’s easier for me to pick them up directly. Plus I buy from Menards and they give me 11% back on purchases (I just used almost 4k in rebates yesterday) and I get skymiles on the hundreds of thousands I spend each year on materials. The guys I use rather just charge me labor anyways. It works out well for all involved.
Delays cost time and time is money . The person responsible for the delay is the one who eats the cost . So when the owner orders materials and its wrong , damaged or short and I have 4 guys on a job getting paid by the hour , the owner is paying my hourly billing rate for those men .
That same delay can change the entire schedule on the job . Costing you even more .
Early on in my career , we did a job and the homeowner wanted to paint himself to save money . We scheduled him for 4 days . Right after that carpet was scheduled , after that electrical trim out was scheduled . Customer only finished half . The carpet guy rescheduled for 2 weeks out and the electrician for 3 weeks . Any savings for the customer were gone and then some .
Delays cost time and time is money . The person responsible for the delay is the one who eats the cost . So when the owner orders materials and its wrong , damaged or short and I have 4 guys on a job getting paid by the hour , the owner is paying my hourly billing rate for those men .
That same delay can change the entire schedule on the job . Costing you even more .
Early on in my career , we did a job and the homeowner wanted to paint himself to save money . We scheduled him for 4 days . Right after that carpet was scheduled , after that electrical trim out was scheduled . Customer only finished half . The carpet guy rescheduled for 2 weeks out and the electrician for 3 weeks . Any savings for the customer were gone and then some .
They're not business owners, they're ignorant that we pay workers comp, payroll taxes, PTO, vacation, medical insurance on our employees.
These hacks don't build in accordance with BPI or LEED standards, seek the cheapest products that outgass high VOC. Ironically people who have no knowledge of building then castigate those who do.
Many in the building industry had hoped the next generation of flippers would embrace building performance & remediate the ever aging poorly performing housing stock. Alas the opposite is true.
The hypocrisy of people crying for a green world yet don't put any effort into addressing this issue is astounding.
most flippers don't even pull permits!
There is a crucial aspect known as specifications. You can consult with an architect who has experience with projects similar to yours in the same city. Request specifications for your materials from them. Then, you can review the provided specifications to determine if they meet your preferences or are appealing to you. Get quotes from contractors based on these specifications. Additionally, explore options for buying the same materials at stores like Home Depot or other retailers.
I would purchase the material first but what did you do?
@Alan F. People confuse the term Contractor with employee .
They think if they buy materials they know how much the contractor will make off them .
When an beginner wants to rehab a house to flip they want to make as much money as possible . They are under the impression a contractor will be happy for the job . And they can negotiate the best price . And when they get that cheap price , about half way thru when things are going south and they realize they hired a cheap hack , its too late .
They read all the books where they are told to keep the contractor on a short leash , buy the materials , manage the job , dont pay deposits , have the contractor sign your contract . They get bad advice . No professional contractor works like that . ( Its kinda like having a tenant provide the lease agreement to the landlord )
When posts like this come up , all the contractors pipe in and give Great advice on how to get a job done . On time and on the contract price .