We’ve all heard the adage, “A dollar saved is a dollar earned.” In no industry does this saying hold more truth than in the fix and flip investment market. That is why experienced investors expend time and resources to find the best fix and flip deals to cut project costs and grow profit margins. In most cases, seasoned investors can unlock flip deals over time by building relationships and working directly with distributors and manufacturers.
But what about fix and flip beginners?
How to Flip Houses for Beginners: Cutting Costs & Optimizing Returns
Although beginners have yet to network and build relationships, with the right strategy, there are still plenty of ways for savvy home flipper newcomers to cut costs and save money.
Let’s look at 8 ways to score the best fix and flip deals for new flippers:
1. Finding the Right Credit Card
While using a good credit card may not be the most earth-shattering tip for saving money, it needs to be said! Not all financial institutions and credit programs are the same. With home rehab projects costing tens or even hundreds of thousands of dollars, finding a credit card with good cash back rewards and incentives makes a significant difference.
These cards allow you to make money while spending money (so long as you pay them off!) Additionally, by utilizing a credit card for materials, home flipping beginners can improve their credit score, which can unlock better financing options down the line.
2. Buy in Bulk
Home flippers looking to flip multiple properties in a year may need larger quantities of materials. By buying in bulk, flippers reduce per-unit costs and gain more leverage with suppliers. In general, the bigger a material order, the more willing suppliers are to negotiate pricing.
When it comes to buying in bulk, investors should take a strategic approach to ordering materials. To create more leverage and reduce costs, try to calculate future needs and consolidate orders into one or two shipments and store excess material.
3. Buying Lumber at the Right Time
Similar to buying in bulk, buying material like lumber at the right time can save money and unlock more cost-saving flipping opportunities. In general, the best time to purchase lumber at a discounted rate is late winter or early spring. With fewer homes being built during the winter months due to the weather, the decreased demand leads to lower prices for you.
While winter (December-February) is typically when materials are at their lowest costs, it’s important for fix and flip deal hunters to consider proper storage and use. Lumber purchased in the winter, if not stored properly, can have higher moisture content and lead to warping or molding. While demand and prices begin to go up in the early spring (March-May), the quality is often better, and storage is less complicated.
4. Search Discount Warehouses, Salvage Yards, & Reuse Centers
“One man’s trash is another man’s gold.” Shopping for aftermarket, leftover and salvaged, or recycled building materials is a great way to find fix and flip deals. By thinking outside the box when it comes to materials and appliances, you can skyrocket returns on your investment. Savvy investors will often turn to discount warehouses, salvage yards, and reuse centers to find great discounts on things like:
- Discontinued flooring and countertop material
- Slightly scratched or dented appliances
- Scrap building materials
- Recycled and reusable building materials
5. Use Online Marketplaces
In today’s digital world, the online marketplace has quickly become a hub for cost savings. Many fix and flip newcomers utilize online marketplaces like Craigslist and Facebook Marketplace to find flip deals on everything from flooring, furniture, appliances, tools, and even labor.
6. Become a “Pro” Member
If you decide to work with a larger big-box home improvement store, take advantage of their pro membership programs. These membership programs often unlock several cost-saving opportunities, fix and flip deals, and provide access to materials for cash-strapped investors.
For example, many of the large chain home improvement stores offer pro membership accounts and credit cards that offer:
- Discounts on bulk materials
- Specials and seasonal offers
- Huge savings on paint purchases
- Cash-back rebates
- Free delivery
- Special financing options
7. Shop Around
When shopping for fix-and-flip houses for sale, you would never purchase the first home you look at. Rather, you would shop around, researching local comps and each fix and flip property’s ROI potential, to uncover the best flipping opportunities.
Well, the same should be true when shopping for project materials! While an entire ROI analysis may not be warranted, shopping around between big box stores, local shops, marketplaces, auctions, liquidations, and other surplus sales is a must if you want to find the best fix and flip deals.
8. Find the Right Lender
In the fix and flip landscape, no relationship can be more advantageous for an investor than one with a reliable and flexible lender. Unlike traditional lenders that come with strict requirements, long approval processes, and vast governmental oversight, private lenders operate outside of bureaucracy. This enables private lenders, like CIVIC, to offer fast, accessible, and flexible financing to investors of any experience level.
By forming a partnership with an established lender, investors can unlock deals on special financing and gain leverage during negotiations. Additionally, some private lenders offer additional rewards through affiliate rewards programs.
For example, CIVIC works with Anqa Rewards. Investors who finance through CIVIC can easily enroll in Anqa’s rewards programs, which can give them exclusive access to premium savings and benefits from big box store suppliers–including up to 25% off on select eligible products at The Home Depot®.
While investment newcomers have yet to form profitable business relationships with distributors and manufacturers, there are still plenty of ways to unlock fix and flip deals. By taking a strategic approach to how, when, where, and what you purchase to renovate a property, investment beginners minimize costs while optimizing profits. And, by working with a reliable and flexible lender, like CIVIC, investors gain the speed, accessibility, and further cost savings needed to succeed in today’s fix and flip markets.
If you’re ready to make the most of your fix and flip business, let the team at CIVIC help you cut costs and grow your business–fast. CLICK HERE to schedule a FREE consultation with a CIVIC team member today.
Authored by Bianca Montalvo
SEO copywriter and strategist
