HI All, I am new here but have been lurking for quite a while. My husband and I have narrowed down our property search and are almost ready to make an offer on our first property to flip. I do have a question though about construction and finish materials.
I am very good at sniffing out bargains. What I have almost always found to be the case with a great bargain is, if you don't grab the item at the time, it will not be there long and you will not see that deal again.
Do you guys just buy random items because they are a great deal and set them aside for some future job? Can you deduct that expense if it is not specifically bought for a property you already own?
I do not because I don't do enough rehabs (yet) to make a huge difference.
i would wait until you ramp up your rehabs etc. Once you are confident you are going to have a steady stream of rehabs it makes more sense to me.
A few factors jump out at me:
what kind of stores/discount places you have locally? In Dallas, there are plenty of places to get discount flooring etc etc so I know I can always find something at some sort of discount
What kind of space do you have to store stuff? I don't have a lot of extra room so I dont even like to store stuff that I have left over from a prior rehab
Will you be able to get enough? I bought some flooring on closeout only to find later I should have bought 3 more boxes. OOPS! It was gone by the time I found out. How will you know how much to buy?
do you save enough to get excited?
There are more questions, but all that I can type now :)
no. i am not a pack rat hoping that in 3 yrs i might use that (can of soup, napkins, butane torch, etc, etc). this is not a 3rd world country. we have everything all the time. and yes, i came from a country that had nothing 365 so i know what i am talking about
paying 50 cents less and keeping it for 4 yrs is a waste of money. i will never understand why people do that. but that's what makes shows like "couponing" so popular.
When I find a deal I will often stock up on materials that I know I'll use but it has to be a really good deal (like half off). I have an 850 sqft storage area at one of my apartment buildings that I keep stocked with commonly used materials. If I find closeouts on light fixtures, ceiling fans, door hardware, faucets, smoke detectors and other commonly used items I'll buy a bunch of them. The items I buy tend to sit for no more than 6 months.
Things that are more project specific (flooring, windows, paint, etc) are better to just buy as needed.
Welcome to the BP family. I suggest you listen to some of the pod casts as I feel they will help. I am a house flipper and no two houses are the same. I try to avoid train wrecks and choose in most instances to do cosmetic improvements. I would not want to tie up cash on products that I may not have any call for. The last few houses I worked on did not have identical requirements, when I need product I think it best to shop instead of maintaining storage space. In my area most all of the flips require some kitchen appliances, I attempt to have the same brand of products as what was left as you might imagine this could present a problem if I purchased before knowing what was required. Food for thought. Again, welcome aboard.
Thanks everyone! As I mentioned, we are about to do our first flip. When sitting down and looking at the spreadsheets on the houses we are interested in, we were surprised at just how fast all of the little things added up!
I have plenty of room to store things, so that is not really an issue.
It was my thought to stock up on some of the more commonly used items when I find them on a major markdown, items similar to those general things mentioned above, hardware, ceiling fans, brushed nickel or oil rubbed bronze bathroom fixtures in a set, lighting fixtures, etc.
From the houses we have seen, these items would almost certainly be used pretty quickly. I have seen some "get rid of it" prices and thought I would just buy them out on some of these things.
It has been my experience when doing major projects at my own home, if I pass on a really great bargain when I see it, I pay the price later when I am actually at the point when I need that item, so was wondering if anyone grabbed these when they saw them.
It looks like most of you buy as needed, so I will just use my best judgement when I see something. If I know it is a real steal, I will go ahead and grab it, but not worry too much about amassing a stockpile of things.
I tend to be overly organized, so thought having some things handy and certain styles ahead of time might direct some of the choices during the rehab.
Have read up on most of the posts here, but will also check out the pod casts - thanks for the tip!
Hi Laura, I've thought about stock piling before because you're right, sometimes it is possible to get incredible deals, but after doing my sums, it didn't make sense to do so because the cost of rental/storage here in Socal is pretty expensive and houses here tend to be a little smaller so not as much room to store stuff at home. Not to mention the additional costs of transporting the materials from storage to site adds another layer of costs.
If its cheap , and commonly used , I buy it up , I have 4 refrigerators , 40 sheets of 1/2 plywood , kitchen cabinets , a whole bundle of 2x4's , paint , and a bunch of other stuff . But I also have 4 sea containers and a 40 by 60 shop . If I cant use it I sell it . I generally buy for up coming maintenance , or if its a great deal , the 2x4's ended up costing me 36 cents a piece .
If I see something go on sale and I know I'll need it within a month, then I'll buy it.
I am a pack rat tend to stockpile and can't seem to organize anything so I need additional storage :). I can't seem to pass up a bargain perceived or real.
I have a forklift so I buy pallets of items I may never use LOL
Yes, If we can use them within 6-9 months. I am all about saving our investors money when it comes to multifamily apartments because the costs add up quickly. Last November I purchased the larger $99 patio umbrellas for two properties for $17 each (clearance time) and some really nice wicker patio chairs from At Home for 75% off. We also purchase the vinyl plank flooring by the case which is 10 pallets at a time to get a lower price.
I used to think this was a good idea too. I would see clearance lights and buy a bunch. But it ended up not being worth it. If you know you are going to need it on the next flip go ahead.
But you often end up not using the item and I had to get a storage unit so the savings was probably nothing. I bought a bunch of flooring on clearance once and used it on 3 jobs and had about 15% of it left but it was too little to do a full house and I couldn't buy more to match. I ended up donating it and the savings disappeared.
I prefer real time inventory. Stockpiling may run the risk of running short of an item, like flooring, but the sale is over and the stock is depleted. Or you over buy and don't use all the material.
I stockpile some things when they are on sale.
I just bought the limit of fire extinguishers at Costco, same for CO2 and smoke detectors. They will all be used.
I am buying flooring that is on sale. I will use it all eventually with several projects going now and some with small rooms like baths that can use smaller amounts that are left.
No. We used to but then you spend forever trying to find it later. If we know we will use it on next job coming up we will but savings is not that much. Only things we would stockup may be a 500 light that is 200 but things like vanities and such are a pain to move twice and if you send a contractor to get it out of storage other stuff can get broken when they sort through.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing