9 Ways to Save Money on Fix and Flip Repairs

18 May 9 Ways to Save Money on Fix and Flip Repairs

The success of a fix and flip investment depends entirely on your ability to sell the rehabbed property at a price that not only recuperates your total investment but also leaves you with a profit. However, if you’re new to the real estate business, it’s all too easy to spend more than necessary on fix and flip repairs —and that can drastically reduce the amount of money you can make. Avoid that mistake by keeping the following eight tips in mind:

Fix and Flip

1. Stick to your budget

Assuming you used financing to purchase the property, you’ll have allocated a portion of the loan or secured additional funds to cover the costs of fix and flip repairs. That sum should be based on the pre-purchase home inspection, as well as a contractor’s assessment of the work that needs to be done and the costs of labor and materials involved. If you use this assessment as a benchmark for each part of the rehab project, you’ll avoid going over budget.

2.   Know what things should cost

You should have a general idea of the cost of plumbing, electrical, roofing, siding, painting and flooring projects BEFORE you get prices from contractors and BEFORE you submit an offer on a project.    If you want to know some tips, join us on June 13, 2019, for our Investor Meetup as we will be discussing how and where to price out renovation projects for your single and multi-family flips / holds.

3. Use subcontractors

Subcontractors’ rates can be as much as 10 percent lower than contractors’ rates. Make sure to hire subcontractors who are licensed, insured, and come well recommended. In addition, draw up an agreement in writing that clearly delineates each party’s rights and responsibilities.

4. Save on materials

Always handle the ordering, purchasing, and picking up of materials yourself. If you let your subcontractors do this, it can cost thousands in extra time, plus, they’re unlikely to do the footwork to keep costs as low as possible. Also utilize all delivery and pricing assistance that your vendors offer, both Home Depot and ABC Supply will be speaking on this at the meet up on 6/13.

5. Special Offers

Look for special offers, loyalty savings, and member or seasonal discounts at regular hardware stores. You can also get volume discounts if you buy at large scale suppliers. Again come to the meet up on 6/13 so Home Depot and ABC Supply can show what they have to offer!

6. Shop at Outlets

One way to pay much less for high-end materials is to shop at outlets for anything from paint to carpet to appliances. Since they mainly sell remnants, you can get significant discounts on anything from hardwood flooring to stainless steel appliances.

7. Salvage Yards

Finally, don’t forget to visit architectural salvage yards to find unique items that add a touch of character to a home, such as ornate fireplaces, stained glass windows, and antique doors.

8. Refurbish

Not everything that’s broken, scratched, or dated needs to be replaced. Refurbishing can be a cost-effective alternative with often surprisingly good results. Think of painting dated kitchen cabinets and replacing the handles; re-using wood from old doors for wide window seats or yard furniture; and having the enamel on sinks, toilets, bathtubs, and showers refinished.

9 Get hands-on

The costs of labor are high, so fix and flip repairs you can do yourself saves money.

Moreover, when you’re at the property, the contractors can come to you directly if they run into problems, which can help prevent delays.

If you keep these nine tips in mind, you can greatly increase your chances of not only staying within your budget, but even finishing below it—and that in turn will increase your profit when you sell the property. And with all the money you’ll save and earn, you can start looking for your next fix and flip opportunity.

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