In my last article, I talked about ways to shake up your design templates, mainly aimed at fix and flip investors. Of course, the landlords care somewhat, the wholesalers couldn’t care less, and note investors can just go to the next blog article now. Last week’s focus was on design inspiration — or where to go to fill your head full of the ideas everyone wants. I did forget to tell you to do your homework, but I’m assuming that you all went out and stuffed your heads full of design ideas by now, right? I mean, they were FREE resources! Now that you have the inspiration, let’s talk about implementation — on a budget.
How to Estimate Rehab Costs!
Estimating rehab costs accurately can make or break your real estate business, and it takes years of experience for even the best rehabbers to master the art. However, you can expose yourself to less risk and get more accurate with your projections by learning how the pros think when estimating construction costs.
8 Clever Ways to Save Big Bucks on Your Next Fix & Flip
I’ve used and abused my Amazon.com account for years now. Prime membership? Of course. Order at least one thing a week? Certainly! Order a ton of cheap snacks and beverages to my Disney hotel room for a week long trip, including a virtual pallet of 24 Monster Energy drinks? Have you met me? Absolutely!
One thing I didn’t realize they had was items that work for the real estate side of my life. My current rehab on the market (which is hotter than the sun itself) has all of its kitchen cabinet hardware, fire alarms, carbon monoxide detectors, and stove vent hood from Amazon. Home Depot and Lowes wanted $5 per cabinet handle for satin nickel, and I got a pack of 25 for $30 from Amazon.
They showed up two days later and were great quality. I don’t know if you are keeping track at home, but that is a HUGE savings. The vent hood was $150 at the local big box home improvement store and cost $79 for something similar. They don’t have everything (I couldn’t find the hinges I was looking for), but next remodel I have, I’ll check on everything from door knobs to light fixtures and compare prices and likely save a ton of money.
Three to four reputable fix and flip investors I know kept talking to me about this site, and of course it took me a little time to actually check it out. Holy moly! This place is design central for the cheapo. That’s me! After discovering the actual brand of the specialty custom hinges that went on my last 1960s kitchen, I found them on build.com for $1.50 each. I’m already looking at their large selection of lighting, bath fixtures, and everything in between for my next project.
Like I said before, if you are thinking of copying popular design on the cheap, someone out there has thought of it and put out a blog or video about how to do it. Case in point, when I was looking for a shiplap look without the cost. A quick Google search led me to a blog where a nice lady detailed buying 5mm plywood, cutting it into 6 inch strips, and nailing them to the wall with nickels for spacers. Then paint the whole thing white, and the average person wouldn’t know if you paid $1,000 or $100 for that trendy look! I’m looking to do a bit of this exact same thing on my own house. Thanks, Google, for connecting me to my fellow frugal people!
Big Box Clearance and Sales
Your local Lowes, Home Depot, and Menards (whatever that is, I’m on the West coast) are frequently making room for new inventory and styles, while getting rid of returned scratched and dented stuff. Stuff like what? Pretty much everything from lighting to appliances and everything in between. If you can hunt and peck through their frequent clearance items or get to know the appliance department, you can score the look you want for much less. Couple that with yearly sales — where I’ve known fix and flippers who pick up 4-5 entire sets of appliances on a Black Friday blowout — then warehouse the appliances for future jobs. Retail prices are for suckers!
Right up there with vinyl flooring, laminate countertops have the same stigma of always being in a 1960s kitchen that looks terrible. Nobody actually uses this dinosaur of a material still, right? Wrong! Like all methods and technology, it eventually got much better. The finishes, the edges, and the patterns have come so far, that for the price, we have been laminating all the houses we get!
It’s half the price of granite, and we are still getting the same top-end price in neighborhoods under median price (and a few over). From a business and cheapo perspective, it just makes sense to put in a great laminate instead of dropping the money on a solid stone surface. I see laminate in spec homes of $1 million dollars or more (albeit in the laundry room, but still). I hear rumors of investors starting to use vinyl plank flooring on flip projects. Maybe vinyl will see a redemption soon and we will all be using it.
Not only can these fine folks tell you what is trending right now, but my new tile/carpet supply store show me a cheaper options for what I want with no hesitation. They work with several fix and flip investors and tell me exactly what those guys/gals are using, the pricing, and of course how much is in stock. Another opportunity is when they have overstock on tile that they need to move and would make a deal on. The more I get to know this company, the more chances I’ll have to jump on something for cheaper than the average investor.
Building Recycle Stores
In my area (Colorado), there are a handful of stores that sell recycled building materials. From tubs to doorknobs to entire kitchen cabinet sets, they have a ton to choose from. On a smaller rehab, I look through their selection to see what they have since it’s pretty darn cheap. On a recent project, I picked up a 48” cabinet to use as a “wall island” in a kitchen. With paint and a new countertop, this solution was cheaper than the big box stores and easier than the hassle of Craigslist. Speaking of which…
Oh, Craig, your list can be both awesome and infuriating at the same time. Good deals? Sure! Flaky people everywhere? Craigslisting (I claim this as a verb now) is an art form, and if you are good at it, you won’t have any issues shopping for mulch, cabinet hardware, doors, tubs or any other items off of it.
From entire kitchens to free mulch, an amazing deal can be had here if you can negotiate it or act quickly. When landscaping my last project, I was surprised to see companies posting about free mulch, complete with drop off in the driveway. Free? That’s the right price!
Don’t underestimate the power of SELLING on Craigslist as well. A seller who had just renovated their bathroom gave me this idea just a few months ago. When he does a renovation, he will sell the kitchen/bath cabinets, the sinks, and even the toilets. Yep, people buy used toilets on Craigslist — at $20-30 a pop! If you do the math, the new one you will put in will cost $80 or so. Selling the old one for $30 means for a little bit of work, you could be effectively buying your brand new toilet for $50 net.
I immediately put up some ’60s bathroom fixtures, a yellow sink and matching yellow toilet, and the pink toilet from the other bathroom. For the cost of a picture and 5 minutes to post it, I sold the yellow items in a week or so. Money is money, and it’s better than just throwing them in a dumpster. Try this on your next project, as long as they are in OK condition, someone out there will buy them!
There you have it — 6 ways to punch your budget right in the mouth and send it home crying. In a red hot market, it’s easy to get away with laminate countertops. Nobody cares! When you have 40 showings in 2-3 days and then have 8 offers, you will get full price for your stone lookalike product. When the market shifts, your frugal activities will pay off in making tighter deals work by saving on your rehab budget. Keep an eye on the happenings in your market. When there is more competition, you might have to shift back to an older standard like granite or higher end appliances. So freshen up your design, make sure that your materials don’t break the budget, and get out there and flip some houses!
How do YOU keep your flipping budget on track?
Let me know your tricks and tips with a comment!