Today I’m going to give a few pointers on how to flip a home and save money in the process.
When you’re rehabbing a property, every dollar you spend eats away at your profits.
So it’s important that you save as much money as you can on the rehab; without sacrificing the quality of the job, of course.
Today I’m going to share some tips on doing just that.
Get What You Pay for
When it comes to dealing with contractors, you usually get what you pay for.
It’s not always the case, but I’ve found that the ones that cost a little more usually charge more for a reason. And that reason is that they are licensed, bonded, insured, and have other expenses that a real, established business would have.
And they need to charge a little more to cover those costs.
These guys also tend to be more responsible and business-savvy.
After my fair share of war stories from dealing with contractors, I’ve developed an affinity for hiring quality contractors, instead of the mom-and-pop kind.
Since I prefer established contractors, I’ve had to find other ways to cut costs as much as possible.
Rehab in the Right Order
One simple way to save money (and headaches), is to do the work in the right order.
For example, you don’t want to do the drywall and painting before you take care of that leaky roof.
If you do, you might spend all of that money on drywall, paint, and labor, only to have to spend more money to do it all over again after rain damages the work.
The Order We Rehab Houses In
Here’s a high-level view of the order we take on rehabs:
- Order dumpster
- Secure the property with new locks
- Implement additional property security tactics (alarms, lighting, neighbor notification, etc.)
- Remove internal/external debris from previous owner
- Handle roof/foundation work (if necessary)
- Secure/repair/replace windows as needed
- Take care of mechanical issues (plumbing/electrical) (if necessary)
- Drywall, painting, updating, and any other interior cosmetic work
- Handle any remaining exterior work that needs to be done, including landscaping
Don’t Overpay for Light Fixtures
You can save a couple hundred dollars easily by getting really nice light fixtures and chandeliers for cheap.
Most people can’t tell the difference between expensive and inexpensive fixtures. So it’s not worth it wasting money on them.
If the buyer of the home wants high quality fixtures, they can replace them once they close on the house.
Expensive light fixtures aren’t going to help the house sell any faster, and definitely won’t boost the value of the home.
Check the Clearance Section
When our contractors go to pick up materials, we always ask them to check to see if any of the items they’re there to pick up are available in the clearance section.
We like to get as many materials as we can from salvage.
You’d be surprised how many nice and clean items you can get from salvage warehouses.
Not only can you save money, but it gives you a chance to feel good about “going green” a little bit, too.
There’s a salvage warehouse here locally in the metro Detroit area that we stop through periodically to see if they have any items we can use in our properties.
The types of items we normally find at the salvage warehouse are sinks, cabinets, toilets, vanities, and doors.