All Forum Posts by: Sam Hickey

I want to start buying some materials in bulk. Anyone know where to get better deals than big box stores on

Flooring, windows, siding, hardware and fixtures, etc.??

I’m considering buying flooring by the shipping container full. I would also be interested in splitting huge purchases with someone reasonably local.

Any interest? And ideas? I have 10 houses that need renovated now and material costs are hurting.

all good advice..  i have worked on both sides of this line..  renovation for another investor, and investing with another contractor..  multiple projects rolling at the moment and about 32 doors up and running..   happy to be a resource is anyone wants to chat further..    im also a mortgage lender and can answer questions about financing.. ( my company doesn't do construction loans so strickly advisory info,  not soliciting..)

its hard to put your own deadline on a contractor based on your desire..   like,   you finish in 5 weeks you get a bonus..  but job is easily 8 weeks and 9-10 if variables come up..     or telling a contractor 2 weeks if its a 4 week job..   you might get sloppier work..   get references,  pics,  talk to previous clients, etc..   get a reasonable time estimate of work and mentally allow for some variance..     so hard to know if you can just replace the tub or if you have to rebuild the wall and floor around it, until you tear out the existing.   some things just affect the time line..   if you wanted to put a penalty on the long end..  say..  contractor says 8 weeks,  and penalty if not completed in 10   or 4 weeks with penalty after 6 or something..    also materials can get held up,  the less expensive flooring is special order for an extra week,  these are legitimate things that could be solved with more money but the point of brrrr is to increase the value the most with the least amount of money, so waiting a week for the cheaper flooring can save you 1,000$ for example..

Jordan,

I live in Joplin MO,  I have flipped a dozen houses and brrrr'd a few as well..  recently i worked with an agent and a non local investor..     worked like this..

agent brought me in ( i have a crew and a couple subs i work with)  we did the scope of work and bid the entire remodel..  i believe the investor bought the house for 60k or so,  we bid the remodel at 35k and the comps/arv were sitting at 120-125k in webb city mo..     appraisal was on friday and waiting to hear how it came back..   the investor chose me because we use the same floors, paint, materials on our own houses and have it down to where he didn't have to make any decisions.   he is happy with the job and looking for the next house for us to reno for him..   truthfully,  i don' have tons of time to work on other peoples stuff as i have my own projects, but we can take on 1 or 2 side projects like this at a time..   i think we finished in 8 weeks at budget.  

now...  my project manager is an agent as well so we can locate, comp, and bid houses all in house..    again,  im not trying to grow my construction company so much as i do like have a couple profitable projects along side my own properties flips/brrrrs.  etc..    either way,  i have lots of connections in mo.  and the price point you are talking about,  you wouldn't need a partner to to take one on..   i just did a two unit ( house with accessorie unit for 65k total cost, and valued at 85k   rents for 950      sw mo is a good location..   

I live in SW Missouri,  Appreciation is harder to come by but I own property in Missouri and KS.    i only consider 1.5% or better.   low cost of entry and the brrrr is alive and well..    flipping margins are lower here too but i have turned a few.   I know some good agents and property managers in the area if interested..

One more under contract.

This is my 4th flip completed.

Bought for 37k. Renovation 17k

Sold for 84,900 and paying 2500 toward closing.

Using an agent to sell

Profit approx 24k

@Frank Patalano

My wife... my spouse is very risk adverse and I was not prepared to get divorced... I spent roughly 2 years negotiating that situation. Once I had her permission to “try” it. I got busy!!

Since faith is the opposite of fear... and faith comes by hearing and hearing by the word of bigger pockets.... I listened to bigger pockets till my wife threatened me ha ha. This “education” help build confidence before that first deal.

Also, my first house I bought with a partner who was also brand new at it. ( a flip). We split the down payment and profit. This helped to mitigate the risk ( in my mind). And even though the profit was less... having the courage to do the first deal and gain that experience was priceless.

That was less than two years ago and now I have 5 employees and 4 projects going at once.

Faith is the opposite of fear.

@Mark Bommarito

Look in smaller towns in the Midwest.

Never paid over 100k for a property.

Bought a duplex for 40k and it cash flows 375 a month positive. As an example.

@LaQuadra Neal

I always start by explaining to them what my goal is and why...

“Mr seller, I buy houses at wholesale prices.... my goal is to bring your house back to its prime and make this a very nice home for the next family that needs/wants it. In that process I also plan to make a profit when I sell the home. In order for me to accomplish that, I have plans to spend approx 25-30k ( example) on renovations in order to update/fix/repair the roof, kitchen, floors etc.. and after the house is complete, I am hoping to sell the home for around 120k ( example) for all of that to work, I would need to buy the house for 65k in its current condition.

I approach this conversation from a teacher/educational point of view. My tone and body language is from a place of respect and professionalism. I want them to know i have done my research and I’m not just “lowballing” them for the sake of starting low. My offer is based on a formula, market research, business model, etc.. I haven’t bought as many houses as a lot of people on the forum but I have never had a home owner get offended at my offer or take it personal when I do this.

I also try to add value that isn’t monetary... for them.

Example: “you mentioned that it’s gonna take you a long time to go through all of grandmas old stuff and clean the house out..... what if I put a dumpster in the drive way for you at no charge.... or better yet, just take the stuff you want to keep and my team will take care of the cleaning after we buy the house... “”.

Giving them permission ahead of time to not fix anything or to just leave the mess as is can create a relief for a seller who is selling moms house after she passed etc...

I also offer to let them come back and have a private showing when the renovation is complete. If the house was a family home, this can be moving for some people who want to see “grandmas house” all fixed up again. They may even get excited that the house is going to “get its sexy back”

Good luck.

@Nicholas Krogmann

Couple thoughts for you.

1. Every market is different... my “numbers” don’t line up with BP calculators and I still turn profits that I am happy with... if you are interested in staying in your market, you may have to adjust you “target” on returns and see if you can make it work. As an example, I average 15-18k on my flips. Nowhere near what seems to be the 30k average I hear.. I also cannot use the 70% rule or I wouldn’t have purchase one flip yet. I had to start analyzing with real number instead of percentages and asking myself. Am I ok with 15k instead of 27k. Etc...

I’m in the Midwest and though houses can be quite cheap the margins can be smaller.

2. Networking...... tell everyone you can what you are looking for... multiple agents/brokers friends, family etc... I have found a handful of deals that started with a phone call..... ( hey, you still buying houses? Etc ).

Good luck.