Welcome back everybody to the second part of our two-part series on How to Save Thousands In Renovation Costs In Your Flips and Rentals. To review what we talked about in part 1 click here.
How are you going to buy material, for your renos, repairs, or flips, at 20, 30 or 40 cents on the dollar? One good way is discontinued items. All retail stores, whether a lighting supply store, or a Home Depot, every once in a while, will change their suppliers. They have to clear out the old inventory with the old product line and bring in the new product line. They will put the old inventory on sale at really good prices to clear out floor space. Get in the habit of talking to your suppliers on a regular basis to see when something like this might be coming up in the future.
A lot of times your suppliers will switch out their samples. For example, cabinet stores will usually have two or three sample kitchen displays in their showroom. Typically, at least once a year, they will take down the old sample kitchen and update it to something new and fresh. You can buy the old sample kitchen boxes and countertops at a great discount.
Overstocks are another way to save money. People buy too much of something sometimes. I once bought a bunch of plumbing fixtures from a plumbing supply warehouse. They had won the bid to supply the sinks, toilets, and fixtures for a new apartment building that was being built. The owner got a deposit, so they went ahead and ordered the supplies, brought them into their warehouse, and then the job got cancelled. They were left with all of this excess inventory that they now had to get rid of. Due to the fact I had a garage to store them in, and they were items I was going to use anyway, I had no problem pulling the trigger.
Damaged items. I am not talking about badly damaged items. Appliances for example. A scratch on the front is no good, but if the scratch or dent is on the side and the layout of your next job has that side facing the wall or hidden by the gable, who cares? Sometimes the handle on a fridge or a knob is broken, these are replacement parts that can be ordered after you get the appliance at a nice discount for being damaged. The discounted appliance plus the cost of the part would still be significantly less than buying the appliance new.
Here is a ‘hack’ for things that come in 4’ x 8’ sheets, like plywood or drywall. A couple of times in my life I was able to buy a pallet of this, for next to nothing, because a forklift driver had backed into it and munched one end. If you can work with what’s left, you can benefit from that. For example, if you can cut off the few damaged inches and still make use of the remaining, perfectly good, 7’ 8”, why not do that?
Auctions or estate sales are a great source as well. Always be on the lookout for things that fit into your color palettes and fixture type, that you might not even need at that particular moment, but you know you will be able to use eventually. Buy it cheap and stick it in your garage until you can use it. Always be on the hunt, always be talking to suppliers and people in the industry.
Again, by turning the regular notion of ‘picking colors or fixtures first and then trying to find deals’ around and instead ‘buying the things we know we will need first and putting them off to the side until we need them’ you can save a lot of money on materials for your renos, repairs and flips.
For more tips like these or advice on which strategy might suit you best, please read my book on "Comparing Real Estate Strategies"
For more advice on how to increase cash flow with your real estate investments, check out my book on "Cash Management in Real Estate Investment"
Or you can always contact me directly and "Book a Chat"
I look forward to hearing from you.