Purchasing Material For Contractors
Flipper/Rehabber 路 Knoxville, TN 路 Member since 2023 路 47 posts 路 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.
@Patrick Goswitz
I give my contractors my credit card and tell them to get whatever they need. Seems to work out great for me.
Personally, I buy finished materials and have contractors buy construction materials. This allows me to control the end result, while keeping the project moving. When you are first getting started, you may find it easier to have contractors control all material purchase and pay the extra cost to get everything accurate and timely.
Tons of responses here for you! It all depends on how you want to set up your business. For me personally, I want to control the finishes.. light fixtures, plumbing fixtures, cabinet pulls etc I will purchase and have shipped to the house. Everything else, I have the contractor buy. Its simpler and less on my plate and therefore I can focus on another house, finding another deal, etc.
I agree. It seems like it all kind of depends. Some contractors on here seem to get really upset if you even ask that question.
No , not really . The contractors are trying to save you from yourselves .
Everybody wants to save a buck , I get it . But when you hire a cheap laborer who says they are a " contractor " . When you buy the cheapest materials , and then complain that the work is bad and the worker took money and wont return . We are trying to save you time , money and heart ache .
I cant count how many times we have been called to come in behind someone else to get the job done right . Most of the time we have to start completely over . Now that $30K project you got a great deal on , which should have cost $ 50K will cost you $90K all said and done .
Contractors negotiate prices with their suppliers , we get a rather nice discount below retail pricing . When we bid a job we use retail pricing to the customer . The difference goes to us , as it should . We built these relationships with our suppliers , subcontractors , etc for years .
Good contractors charge a premium for their work , because we can , you are paying for our skill , our experience , and our relationships with our subs .
You are NOT paying for our labor and materials , its much more than that , office staff , trucks , tools , insurance , taxes , benefits , health insurance , etc are all part of the price . After all that we will make a profit .
If you cant afford to do it right , how will you afford to do it over ?
As a contractor, I never let anyone but me purchase the materials. Why? Because I know exactly what's needed, and how much. I don't want my time wasted by someone who doesn't purchase materials for a living.
When I worked mostly for home owners, I'd have some who wanted to buy the paint, or some such. Well, I'd bid the job, they'd buy the paint, only they'd show up with the cheapest Glidden product on the shelf that I'd have to put 3 coats onto a wall to cover. This costed me more in my time, yet my bid was submitted. A respectable paint would require a good first coat and a fast 2nd touchup fill in generally.
In another situation, my customer would buy faucets. They got the cheapest brand at the store. I installed them. I was back out there in 6 months replacing them because the gaskets leaked or the handles broke.
Over the last 10 years I've created and maintained relationships with investors, now friends. I don't mark up materials. I charge them what they cost me and I get a better price than anyone else because of the volume I spend.
I do charge for my time and 25+ years of experience as a contractor. This works the best for us but it takes some trust and you SHOULD know roughly what materials are gonna be so that you can get an idea of markups if any. This takes perhaps a few projects to get the hang of.
As a contractor, I never let anyone but me purchase the materials. Why? Because I know exactly what's needed, and how much. I don't want my time wasted by someone who doesn't purchase materials for a living.
When I worked mostly for home owners, I'd have some who wanted to buy the paint, or some such. Well, I'd bid the job, they'd buy the paint, only they'd show up with the cheapest Glidden product on the shelf that I'd have to put 3 coats onto a wall to cover. This costed me more in my time, yet my bid was submitted. A respectable paint would require a good first coat and a fast 2nd touchup fill in generally.
In another situation, my customer would buy faucets. They got the cheapest brand at the store. I installed them. I was back out there in 6 months replacing them because the gaskets leaked or the handles broke.
Over the last 10 years I've created and maintained relationships with investors, now friends. I don't mark up materials. I charge them what they cost me and I get a better price than anyone else because of the volume I spend.
I do charge for my time and 25+ years of experience as a contractor. This works the best for us but it takes some trust and you SHOULD know roughly what materials are gonna be so that you can get an idea of markups if any. This takes perhaps a few projects to get the hang of.
Fair enough. You don't want the customer purchasing the material because they often screw up or don't know what is needed. I completely understand that.
How about this...I give you my credit card to purchase the materials. Is there any problem with that?
Customer buys the materials , what could possibly go wrong .....................?
The minute a potential customer asks that question , its time to say , good bye .
Everything contractors do and should have a mark up , labor , materials , subcontractors , dumpsters , etc . This is how we make a living and cover our bills . Contracting is a business , profit is the goal , not a paycheck .
If you want points on your credit card , ask your contractor if they take credit cards , I do . You pay 4% credit card fee .
.
Ok fair enough. You don't want the customer to buy materials because they buy cheap materials or wrong materials. I completely understand. What about just giving the contractor my credit card to purchase the materials that are needed. Any problem with that?
Customer buys the materials , what could possibly go wrong .....................?
The minute a potential customer asks that question , its time to say , good bye .
Everything contractors do and should have a mark up , labor , materials , subcontractors , dumpsters , etc . This is how we make a living and cover our bills . Contracting is a business , profit is the goal , not a paycheck .
If you want points on your credit card , ask your contractor if they take credit cards , I do . You pay 4% credit card fee .
.
Ok fair enough. You don't want the customer to buy materials because they buy cheap materials or wrong materials. I completely understand. What about just giving the contractor my credit card to purchase the materials that are needed. Any problem with that?
I get a 40% discount off retail with my supplier due to my volume purchaces and prompt payment . You get charged retail . The 40% goes to the contractor .
You can pay the contractor with your credit card for everything .
Customer buys the materials , what could possibly go wrong .....................?
The minute a potential customer asks that question , its time to say , good bye .
Everything contractors do and should have a mark up , labor , materials , subcontractors , dumpsters , etc . This is how we make a living and cover our bills . Contracting is a business , profit is the goal , not a paycheck .
If you want points on your credit card , ask your contractor if they take credit cards , I do . You pay 4% credit card fee .
.
Ok fair enough. You don't want the customer to buy materials because they buy cheap materials or wrong materials. I completely understand. What about just giving the contractor my credit card to purchase the materials that are needed. Any problem with that?
I get a 40% discount off retail with my supplier due to my volume purchaces and prompt payment . You get charged retail . The 40% goes to the contractor .
You can pay the contractor with your credit card for everything .
I am would be fine this!
@Patrick Goswitz from different point of view. I was licensed contractor ~no longer needed for construction loans. I've DIY'ed some of my own personal smaller contracts. If I order HVAC or plumbing parts from China generally the measurements of fittings are off and delivery takes 30+ days. Alibaba may look cheaper but ONLY if it's new build not retrofit.
Cabinet pulls at Target designed by Frank Gehry, no wait those are out of stock and we needed 32 not 4.
Giving your credit card to contractor, hmm. Things get stolen on job sites. Will your card cover for commercial use (a personal credit card will not). Who is signing for delivery? You are going to the job site and picking up the part and bringing it to return to the locker at Whole Foods or boxing up and driving it Idaho? How many phone calls and emails to track the new parts that were needed yesterday? Maybe the contractor buys everyone on the jobsite In and Out on your card because of the difficulty?
Yes the miles or points sound good but 3000 points generally can be converted to 1 cent in payment credit.
I relieve the contractor wallet and he just need to track his labor part. After buying with contractor TOGETHER a few times you learn a lot of material cost. Where to shop for parts. Brands.
You are confusing contractors with day laborers .
A contractor is a licensed professional . Provides a finished product at a price
A Day laborer works by the hour
Customer buys the materials , what could possibly go wrong .....................?
The minute a potential customer asks that question , its time to say , good bye .
Everything contractors do and should have a mark up , labor , materials , subcontractors , dumpsters , etc . This is how we make a living and cover our bills . Contracting is a business , profit is the goal , not a paycheck .
If you want points on your credit card , ask your contractor if they take credit cards , I do . You pay 4% credit card fee .
.
Ok fair enough. You don't want the customer to buy materials because they buy cheap materials or wrong materials. I completely understand. What about just giving the contractor my credit card to purchase the materials that are needed. Any problem with that?
Customer buys the materials , what could possibly go wrong .....................?
The minute a potential customer asks that question , its time to say , good bye .
Everything contractors do and should have a mark up , labor , materials , subcontractors , dumpsters , etc . This is how we make a living and cover our bills . Contracting is a business , profit is the goal , not a paycheck .
If you want points on your credit card , ask your contractor if they take credit cards , I do . You pay 4% credit card fee .
.
Ok fair enough. You don't want the customer to buy materials because they buy cheap materials or wrong materials. I completely understand. What about just giving the contractor my credit card to purchase the materials that are needed. Any problem with that?
Justin makes a good point! There are too many things to go wrong when a customer tries to do a workaround on material purchasing just to get stupid points on a credit card. There aren't even usually that much value in points involved.
You can see a clear trend here that contractors are not a fan of what you're trying to do. There is a good reason for that. It screws up the project!
The only contractors that you will be working with if you persist in this approach are a) unlicensed contractors, b) new contractors, or c) bad contractors.
Customer buys the materials , what could possibly go wrong .....................?
The minute a potential customer asks that question , its time to say , good bye .
Everything contractors do and should have a mark up , labor , materials , subcontractors , dumpsters , etc . This is how we make a living and cover our bills . Contracting is a business , profit is the goal , not a paycheck .
If you want points on your credit card , ask your contractor if they take credit cards , I do . You pay 4% credit card fee .
.
Ok fair enough. You don't want the customer to buy materials because they buy cheap materials or wrong materials. I completely understand. What about just giving the contractor my credit card to purchase the materials that are needed. Any problem with that?
Justin makes a good point! There are too many things to go wrong when a customer tries to do a workaround on material purchasing just to get stupid points on a credit card. There aren't even usually that much value in points involved.
You can see a clear trend here that contractors are not a fan of what you're trying to do. There is a good reason for that. It screws up the project!
The only contractors that you will be working with if you persist in this approach are a) unlicensed contractors, b) new contractors, or c) bad contractors.
Right? Can you imagine me trying to explain I need 30 afci/gfci breakers at $68 a pop, or an ERV & They bring me some Chinese junk from Amazon.
Some trunk slammer bought boxes of duplex receptacles & the polarity was reversed on the screws! He said it didn't matter because POS black & decker jigsaw "still worked"
Customer buys the materials , what could possibly go wrong .....................?
The minute a potential customer asks that question , its time to say , good bye .
Everything contractors do and should have a mark up , labor , materials , subcontractors , dumpsters , etc . This is how we make a living and cover our bills . Contracting is a business , profit is the goal , not a paycheck .
If you want points on your credit card , ask your contractor if they take credit cards , I do . You pay 4% credit card fee .
.
Ok fair enough. You don't want the customer to buy materials because they buy cheap materials or wrong materials. I completely understand. What about just giving the contractor my credit card to purchase the materials that are needed. Any problem with that?
Justin makes a good point! There are too many things to go wrong when a customer tries to do a workaround on material purchasing just to get stupid points on a credit card. There aren't even usually that much value in points involved.
You can see a clear trend here that contractors are not a fan of what you're trying to do. There is a good reason for that. It screws up the project!
The only contractors that you will be working with if you persist in this approach are a) unlicensed contractors, b) new contractors, or c) bad contractors.
Right? Can you imagine me trying to explain I need 30 afci/gfci breakers at $68 a pop, or an ERV & They bring me some Chinese junk from Amazon.
Some trunk slammer bought boxes of duplex receptacles & the polarity was reversed on the screws! He said it didn't matter because POS black & decker jigsaw "still worked"
I love 'trunk-slammer'......!
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 buy all major materials by myself with a HD Pro card which gives me points and credits to use towards my purchase. My suggestion is that you should buy the material which give you an idea of the price of the materials. Because I pay for the materials, I know the cost of each items now. Now I can tell if the contractor charge me more than it really cost.
When you give the job, you can do it two ways. One with all inclusive or Two you buy the material and they charge you for the labor. You will definitely will save some money if you choose option 2. But don't ever give a contractor your credit card, unless you trust them 100%. They will buy material for their personal job using your card.
I just picked up some replacement windows at the supply house , custom ordered .
The manager asks me if I need some mis ordered windows cheap ?
I go back and look , these were top of the line anderson replacements , and they were big . I had no use for them .
He then tells me the story , A Homeowner ordered the windows , measured himself , he wanted the contractor discount , ( they still charged him retail ) . They delivered them . And were paid in full . Delivery time was to be at noon .
The crew he got to install them showed up at 7 and was told to remove ALL the old windows , get a head start . So they did , and threw all the old windows in the dump trailer , breaking the glass as they went .
The homeowner measured WRONG . So the house he was living in had 18 open holes .
Supply house took windows back pending any credit from manufacturer , it was denied all the paperwork was correct . Made to order . They will credit the customer if someone buys them at what ever they can get .
It was about $14,000 in windows down the drain . Plus another 14 K to re order . Pay the contractor for the removal and what ever else he did . AND WAIT 6 WEEKS FOR NEW ONES .
But the good thing is all the extra points he got on his card .
( I did pick up a nice exterior door for $75 )
That's great. But you will never get a GOOD Contractor to work for you when you operate like that.
And you missed all the examples of what can go wrong when the customer puts themselves in charge of materials acquisition.....wrong items, wrong sizes, too many, too little, on and on.....
I just picked up some replacement windows at the supply house , custom ordered .
The manager asks me if I need some mis ordered windows cheap ?
I go back and look , these were top of the line anderson replacements , and they were big . I had no use for them .
He then tells me the story , A Homeowner ordered the windows , measured himself , he wanted the contractor discount , ( they still charged him retail ) . They delivered them . And were paid in full . Delivery time was to be at noon .
The crew he got to install them showed up at 7 and was told to remove ALL the old windows , get a head start . So they did , and threw all the old windows in the dump trailer , breaking the glass as they went .
The homeowner measured WRONG . So the house he was living in had 18 open holes .
Supply house took windows back pending any credit from manufacturer , it was denied all the paperwork was correct . Made to order . They will credit the customer if someone buys them at what ever they can get .
It was about $14,000 in windows down the drain . Plus another 14 K to re order . Pay the contractor for the removal and what ever else he did . AND WAIT 6 WEEKS FOR NEW ONES .
But the good thing is all the extra points he got on his card .
( I did pick up a nice exterior door for $75 )
Hilarious......馃ぃ
I just don't get this obsession with a few credit card points. People would rather get a few lousy bucks or miles than have their project go as it should...
I just picked up some replacement windows at the supply house , custom ordered .
The manager asks me if I need some mis ordered windows cheap ?
I go back and look , these were top of the line anderson replacements , and they were big . I had no use for them .
He then tells me the story , A Homeowner ordered the windows , measured himself , he wanted the contractor discount , ( they still charged him retail ) . They delivered them . And were paid in full . Delivery time was to be at noon .
The crew he got to install them showed up at 7 and was told to remove ALL the old windows , get a head start . So they did , and threw all the old windows in the dump trailer , breaking the glass as they went .
The homeowner measured WRONG . So the house he was living in had 18 open holes .
Supply house took windows back pending any credit from manufacturer , it was denied all the paperwork was correct . Made to order . They will credit the customer if someone buys them at what ever they can get .
It was about $14,000 in windows down the drain . Plus another 14 K to re order . Pay the contractor for the removal and what ever else he did . AND WAIT 6 WEEKS FOR NEW ONES .
But the good thing is all the extra points he got on his card .
( I did pick up a nice exterior door for $75 )
Hilarious......馃ぃ
I just don't get this obsession with a few credit card points. People would rather get a few lousy bucks or miles than have their project go as it should...
Consumer mindset, they've never been business owners with a producers mindset. Most folks have a w2 job
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.
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.
CA state license board requires warranty on materials defects & labor
I just picked up some replacement windows at the supply house , custom ordered .
The manager asks me if I need some mis ordered windows cheap ?
I go back and look , these were top of the line anderson replacements , and they were big . I had no use for them .
He then tells me the story , A Homeowner ordered the windows , measured himself , he wanted the contractor discount , ( they still charged him retail ) . They delivered them . And were paid in full . Delivery time was to be at noon .
The crew he got to install them showed up at 7 and was told to remove ALL the old windows , get a head start . So they did , and threw all the old windows in the dump trailer , breaking the glass as they went .
The homeowner measured WRONG . So the house he was living in had 18 open holes .
Supply house took windows back pending any credit from manufacturer , it was denied all the paperwork was correct . Made to order . They will credit the customer if someone buys them at what ever they can get .
It was about $14,000 in windows down the drain . Plus another 14 K to re order . Pay the contractor for the removal and what ever else he did . AND WAIT 6 WEEKS FOR NEW ONES .
But the good thing is all the extra points he got on his card .
( I did pick up a nice exterior door for $75 )
Hilarious......馃ぃ
I just don't get this obsession with a few credit card points. People would rather get a few lousy bucks or miles than have their project go as it should...
Consumer mindset, they've never been business owners with a producers mindset. Most folks have a w2 job
I think you're absolutely right! I forget about this....
Absolutely! It is usually indicative of a 'cheap' mindset.... and I would refuse to even give them a quote once that was brought up. It just meant problems down the road during the project.....something was always wrong,
Cheap people tend to be unreasonably picky as well, and with no real understanding to back up their concerns.