Flips/Cost of Materials (by WMH [NC]) Jan 4, 2021 8:58 AM|
Flips/Cost of Materials (by NE [PA]) Jan 4, 2021 9:01 AM
Flips/Cost of Materials (by Jasper [OH]) Jan 4, 2021 9:30 AM
Flips/Cost of Materials (by Roy [AL]) Jan 4, 2021 9:37 AM
Flips/Cost of Materials (by RentsDue [MA]) Jan 4, 2021 9:48 AM
Flips/Cost of Materials (by myob [GA]) Jan 4, 2021 10:03 AM
Flips/Cost of Materials (by WMH [NC]) Jan 4, 2021 10:17 AM
Flips/Cost of Materials (by myob [GA]) Jan 4, 2021 10:44 AM
Flips/Cost of Materials (by WMH [NC]) Jan 4, 2021 11:14 AM
Flips/Cost of Materials (by WMH [NC]) Jan 4, 2021 11:17 AM
Flips/Cost of Materials (by Ken [NY]) Jan 4, 2021 11:54 AM
Flips/Cost of Materials (by S i d [MO]) Jan 4, 2021 11:58 AM
Flips/Cost of Materials (by Smokowna [MD]) Jan 4, 2021 11:59 AM
Flips/Cost of Materials (by NE [PA]) Jan 4, 2021 12:10 PM
Flips/Cost of Materials (by Oregon Woodsmoke [ID]) Jan 4, 2021 12:21 PM
Flips/Cost of Materials (by Dave [MO]) Jan 4, 2021 12:59 PM
Flips/Cost of Materials (by Renne [TX]) Jan 4, 2021 3:48 PM
Flips/Cost of Materials (by DJ [VA]) Jan 4, 2021 5:21 PM
Flips/Cost of Materials (by Ken [NY]) Jan 4, 2021 5:57 PM
Flips/Cost of Materials (by Robin [WI]) Jan 4, 2021 6:34 PM
Flips/Cost of Materials (by Ray-N-Pa [PA]) Jan 4, 2021 7:56 PM
Flips/Cost of Materials (by Robert J [CA]) Jan 5, 2021 2:42 PM
Flips/Cost of Materials (by mike [CA]) Jan 5, 2021 6:31 PM
Flips/Cost of Materials (by Chris [CT]) Jan 8, 2021 1:36 PM
Flips/Cost of Materials (by WMH [NC]) Jan 8, 2021 5:45 PM
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Flips/Cost of Materials (by WMH [NC]) Posted on: Jan 4, 2021 8:58 AM
We don't flip, we are buy & hold. But our last build-out of a garage apartment to a true Accessory Dwelling Unit cost us 3x the usual amount because materials are so high. Simple stuff: cabinets, countertops, etc. nothing elaborate. DH did all much of the work but we did hire a painter/handyguy to do some siding repairs, etc. He was reasonable so can't blame him.
So my question is this: I see a fair number of LLs on here selling and / or not buying and moving to flips instead.
Can you still make money on them? How are you handling the sharp rise in materials? Has housing gone up so much you can absorb that much of a hit and still make money on a flip?
Have your "in your head" calcs when you look at a flip been skewed at all? --50.82.xxx.xxx
Flips/Cost of Materials (by NE [PA]) Posted on: Jan 4, 2021 9:01 AM
Buy them cheap enough so you don't have to do anything to them. Just resell them. --174.198.xx.xx
Flips/Cost of Materials (by Jasper [OH]) Posted on: Jan 4, 2021 9:30 AM
Still making a good profit on flips. Yes, housing has gone up that much. I will consider refurbishing instead of putting in new materials sometimes, but overall profits are very good. --173.188.xx.xx
Flips/Cost of Materials (by Roy [AL]) Posted on: Jan 4, 2021 9:37 AM
I did a major rehab over the summer and I know what you mean about sky high lumber cost. $49.50 for 1 sheet of 3/4 inch plywood? Outrageous. I had no choice but to pay it. 2x4x8, 2x6x12's, plywood, OSB all increased to ridiculous prices. There was time when no 5/4 decking boards were even available.
Due to shortages of materials and grunt labor, a rehab that would normally take 60 days,...consumed 150 days.
I keep thinking that once this pandemic gets under control, material building cost will get back down to normal.
Flips/Cost of Materials (by RentsDue [MA]) Posted on: Jan 4, 2021 9:48 AM
Excellent question. Have a project on hold right now due to material costs. Our typical ď flipĒ isnít so typical.Tearing down the old house and build a new one in its place. There isnít a lot of affordable raw land available so itís sometimes more cost effective to buy the house for the lot itís on. Between materials and the weather.... winter was coming. Hoping for a gentler spring on both fronts. We have not seen outsourced labor go up too much. --75.133.xxx.xx
Flips/Cost of Materials (by myob [GA]) Posted on: Jan 4, 2021 10:03 AM
I'm crazy! I may be the only one who thinks its going to get more expensive? NOT LESS.
Housing Values in ATL shot up 20% last year-- rents up 15 to 23% I should worry that a 2x4 cost .29 cents more?
Projects on hold??? maybe in places that's in a slump value wise. --99.103.xxx.xxx
Flips/Cost of Materials (by WMH [NC]) Posted on: Jan 4, 2021 10:17 AM
MYOB, 2x4 prices tripled, not $.29 cents more.
Cabinets were in short supply: factories shut down. Driving all over heck to complete a project. Ditto counter-tops.
Lots of materials on back order as people were sheltering in place and doing long over-due home improvement projects.
Plywood prices up, as noted above. T-111. The list goes on. The ONLY thing that didn't go up was Allure LOL! --50.82.xxx.xxx
Flips/Cost of Materials (by myob [GA]) Posted on: Jan 4, 2021 10:44 AM
Gosh that's funny WMH--- thank god Allure prices stayed steady!!!!!
I posted yesterday under another item about this driving around to save a few bucks-- I stopped doing that in 1987.
Flips/Cost of Materials (by WMH [NC]) Posted on: Jan 4, 2021 11:14 AM
OH we weren't trying to save a few bucks, MYOB. We were trying to FINISH THE PROJECT which was costing us $$$$ in lost Rent Money!
We don't drive dollars to save pennies anymore, and we don't stock up on supplies anymore. We buy it when and as we need it at whatever price it is.
But in this case, since we are isolated with few choices: if local HD and Lowes are out of cabinets and countertops and enough boxes of Allure (and they were) then he had to drive up to (several) stores in Virginia to get them.
A real pain both in time and money... --50.82.xxx.xxx
Flips/Cost of Materials (by WMH [NC]) Posted on: Jan 4, 2021 11:17 AM
So, with what that project ended up costing us both in materials overages and lost rent due to time lost, we are calculating that our two "someday" back-pocket projects are not worth the money right now. Getting old, don't want to wait a decade for payback.
They are "free" (existing buildings on rental property with main houses already rented) and don't add even to tax value really. We'll see how 2021 goes. --50.82.xxx.xxx
Flips/Cost of Materials (by Ken [NY]) Posted on: Jan 4, 2021 11:54 AM
Have to buy the project cheap enough to make sense.As NE said just resell as is and let a beginner deal with it,they will pay a lot more than i will.Also if anyone is doing the physical work to make the deal work it isnt a deal --72.231.xxx.xxx
Flips/Cost of Materials (by S i d [MO]) Posted on: Jan 4, 2021 11:58 AM
Not doing any flips right now except for wholetales (clean 'em out, sell to someone else). I don't have the volume nor the crews to do full gut/resells that my market demands to make any money worth speaking of. Guys like NE have a crew and do several each year. I find little to no ability to do that if I'm not on it full time and keeping them busy.
Lots of small time new competition in town. They'll settle for a $5000 profit on a job that takes 2-3 months of 15-20 hours per week hunting deals, negotiating, managing the crew, and material scrounging. Not interested. Easier ways to make money from my desktop by restructuring existing debt into lower rates and/or paying off small loans to juice up the cash flow.
Recently, I've started focusing on bigger commercial deals. 2 of the last 3 I've bought I was able to significantly increase rents and therefore also increase the values of these properties. Why mess with ten $40,000 houses when I can tackle one $400,000 project that makes the same amount (or more) but with only 10% of the effort?
Time is money.
Things I really like about our commercial units: they are essentially steel framed boxes with concrete floors that have drains in the middle. This is exactly the type of "tenant proof" structures I originally though we be ideal for Class C investing. No flooring, overhead LED light fixtures designed to last 15+ years, no termites, no dry rot and only basic plumbing, heat, and air systems that are all exposed and easy to work on without pulling out drywall, etc. All this to say I haven't bought many supplies this year for those properties. Also, my tenants have businesses that carry inventory they can sell and LOC or savings they can tap into during slow months. So far, so good. I'll letcha all know how I feel about it in 12 months. (*grins)
Flips/Cost of Materials (by Smokowna [MD]) Posted on: Jan 4, 2021 11:59 AM
I'm lucky I stocked up too much years ago. It was not the wise thing to do...but it was done. These days if I need something I normally have it.
Percentage wise, all I really buy is paint.
To answer your question, it still seems as though projects will pencil taking into consideration the cost of loan service is lower now. --108.28.xx.xxx
Flips/Cost of Materials (by NE [PA]) Posted on: Jan 4, 2021 12:10 PM
Auctions are a great source for cheap building materials. But that does require you to be near humans. --70.44.xxx.xx
Flips/Cost of Materials (by Oregon Woodsmoke [ID]) Posted on: Jan 4, 2021 12:21 PM
I wouldn't attempt a flip around here, not because of materials, but because I can't get labor.
My son is trying to get a 60X60 shop built and it is going on 22 months right now and still not finished. I put a whole house generator in that can't be used until the gas company comes out and changes the meter. Four months and counting, although 2 months of that was waiting for the generator to be delivered. Perhaps the gas company is having trouble finding a replacement meter?
In no way would I even attempt to do a flip. Even I could even find a house to flip, which would be very close to impossible. Too many buyers snapping up anything that comes on the market in just days and overpaying when they do it. --76.178.xx.xx
Flips/Cost of Materials (by Dave [MO]) Posted on: Jan 4, 2021 12:59 PM
Exactly, as NE and Ken mentioned. Buy cheap, go in and clean the house up, little shine and list it on the market and the new investors and newer agents don't know the market well enough and agents, tell their investor there is money to be made! A little money, first base but no home runs at these prices. Basically, WMH these new guys are buying a job in my opinion but then you get to adding all the cost up and as you mentioned and short supplies of material, it gets expensive quick. You must know your market well now, if your buying or selling to know how to capture the most gain in your asset. --173.47.xxx.xx
Flips/Cost of Materials (by Renne [TX]) Posted on: Jan 4, 2021 3:48 PM
WMH, I know exactly what you mean! We had a tiny 6 x 6 landing added to a home and it was $600 just in materials! You are right about Allure also- we are switching from outside projects that involve wood to indoor Allure projects right now as they are so much less expensive to complete! I do not foresee the cost of lumber going down anytime soon.
By the way, thank you so much for all your posts about ADUs. That got us thinking outside the box and we were able to turn a 3 bedroom 1 bath farmhouse into two 1 bed 1 bath homes and our profit more than doubled. And another plus is they are super easy to rent.
All the best!
Flips/Cost of Materials (by DJ [VA]) Posted on: Jan 4, 2021 5:21 PM
Yes, materials are WAY expensive - IF you can FIND them!
It's on my mind a lot right now.
I'm just finishing a renovation and have it for sale. It should, hopefully sell for enough to make up the difference & still give a good profit. But, like WMH, I had to go to 4 different stores to get 5 kitchen cabinets, etc.
Hopefully, I will get possession of a rental tomorrow in court that needs a TOTAL gut rehab. I'm trying to figure out how to do it for a price where the market rent will be sufficient for an appropriate profit.
Flips/Cost of Materials (by Ken [NY]) Posted on: Jan 4, 2021 5:57 PM
DJ,consider selling the place,prices are high and the market is hot,let someone else figure out how to get it done --72.231.xxx.xxx
Flips/Cost of Materials (by Robin [WI]) Posted on: Jan 4, 2021 6:34 PM
We were rebuilding a deck in the spring when you couldn't find PT lumber for love or money. We ended up buying several used railing sections from someone who was replacing theirs with cast iron, and cutting them down to fit. It actually saved us quite a bit in labor because the railings were already painted white!
We lucked out on the 15 sheets of 3/4" plywood we needed in our current flip. We ordered the wood when we did the flooring special order. Fell behind and didn't pick it up for 3 months, by which time it had more than doubled in price. They honored the price, though!
I predict prices will go down eventually, but in the meantime we're not considering acquiring anything that needs major amounts of materials. --104.230.xxx.xx
Flips/Cost of Materials (by Ray-N-Pa [PA]) Posted on: Jan 4, 2021 7:56 PM
I picked up a place in November at the judicial sale. Over sized garage but a ratty looking house on a triple lot, about 3/4 miles from a lake.
I still haven't gotten the deed on the place, and I have been offered twice what I spent on the place already. I typically don't flip places, but after I look the cost of repairing it.........I am considering selling the place. When you can a place for 9.9K it doesn't take much to make money on it. --24.101.xxx.xx
Flips/Cost of Materials (by Robert J [CA]) Posted on: Jan 5, 2021 2:42 PM
There are cost involved with buying and selling a property, and then there are the taxes. Here in Southern California the average home is around half a million dollars. So the brokers commissions, transfer tax, escrow, title insurance, etc is going to cost around 8% of the sales price. This eats into profit!
Materials are expensive plus we have 9.5% sales tax. Labor cost are high so when you add the workers insurance, that makes labor costs 25%-40% higher than anywhere in the country.
So flipping here in California is a hard thing to do if you looking to make a profit.
I purchased a commercial retail building. Painted the exterior and did some landscaping. Then the next 3 tenants over the first 10 years made all of the interior improvements. So when I went to sell, I had little money invested in the upgrades and was able to make a large profit. So my Flipping in California is a Buy, Hold, Rent and Sell.... not over night. --47.155.xx.xxx
Flips/Cost of Materials (by mike [CA]) Posted on: Jan 5, 2021 6:31 PM
canada is our number one lumber supplier...i will remind trump, and his dullard pal peter navarro, that trade sanctions go both ways. one of his first acts was a duty on softwoods...
11/24/2020 The U.S. Department of Commerce set a new duty rate of 8.9 per cent on average after completing its first administrative review on softwood lumber imports from Canada.
The new rate is down from the original 20.2 per cent average duty imposed in 2017 by the U.S., which alleged Canada was both unfairly subsidizing its industry and then dumping wood into the U.S. at unfair prices. --75.80.xx.xx
Flips/Cost of Materials (by Chris [CT]) Posted on: Jan 8, 2021 1:36 PM
I'm into lumber for about another $120k on my projects this year.
Yes prices are up but profits are the same or down because of material cost an delays. --24.45.xxx.xxx
Flips/Cost of Materials (by WMH [NC]) Posted on: Jan 8, 2021 5:45 PM
Rene, you are more than welcome. I know it was a revelation for us when we found out about them. --50.82.xxx.xxx
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