Purchasing Materials for Contractors

[Patrick Goswitz]

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.

[Alan F.]

Quote from @Patrick Goswitz:

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 don't know what state your in, I would've included a link to the state license board which may outline a "home improvement contract"

Generally tho no, contractors should provide all of their own materials, for warranty purposes, familiarity with execution & other reasons. 

A reputable contractor buys wholesale, not retail, provides manufacturs warranty & his labor warranty. Shopping a reputable contractor against home depot or Amazon will only attract a poorer quality contractor.

Instead develop your own scope of work. Get at least 3 (5 is better) estimates on the same scope of work. While they're walking the job pick their brains & learn everything you van.

Look at the license boards requirements on license, bond, insurance & most importantly down payment. Make sure a draw schedule is agreed upon & signed, if he wont cant agree and comply (or not know) about all of this publicly available information go to the next 1. Run like a business, flipping is great, run like a hobby...well.

This is a all just my opinion & others will disagree. Best of luck.