Modifying your construction roadmap to account for appliance shortages

Some household appliances are still hard to come by. At the very least, you could be waiting a few extra weeks or months to get your appliances. In a recent build-to-rent episode, our hosts discuss some of the changes they've had to make in order to get their projects leased up.

Watch the full episode here: https://youtu.be/6uHbi4-LkHw

How have we not talked about appliances yet? I mean, that was a beast for quite a while wasn't it?

Sherida Zenger

Yeah, I think we're still seeing delays. I know my kids just moved into some townhomes recently. We had to wait a month and a half for fridges, which is nothing at all. I mean, I know there were times where it was like four or five, six months or you couldn't even get a fridge.

Steve Olson

Yep, absolutely right. So not saying this to discourage you. We're just telling you this to be aware...

When you go into a build-to-rent project, you're going to need to bump that contingency up. You're going to need to lengthen that timeline because many of these delays are just beyond your or anyone's control.

The big, big, big, builders are getting fed. They're still getting what they need. But if you're not a giant account, you've got to scrap for some of this stuff to get it together. And you know, we're a pretty big account and we can pull some strings, right, but some cannot be pulled.

Sherida Zenger

We've done a good job also at buying in bulk or buying ahead of time. I know when we're in one of our projects in Idaho, we had just closed on them. And I got a call from an investor saying,

Hey, this is really weird on my draw, it shows garages, why would I be paying for garage doors, and I just closed, you know, a couple of weeks ago. So I called the builder and said, Hey, I don't know if this was an error, what's going on? And they said, No, actually, they're actually increasing prices.

And there's been a shortage, we just decided we would go ahead and bulk Order, order ahead and get this better pricing to kind of help save some money, which was a great explanation, right? And talk to the investor. And he said, Oh, that's awesome.

Knowing that stuff and having the right people in place that can preorder stuff, and they're aware of when increases are happening and whatnot. Yeah, I think it's helpful too.

Steve Olson

If you remember, at the beginning of the lockdown, there was a shipping problem coming out of China. And I got a lot of questions at the time. What what's this going to do? And I was very dismissive of it, and I'll stop worrying. Everything's fine.

It was door hardware and LVT flooring at the time. That's okay. Now, right now, it's lumber. This is a ripple effect. And we haven't it's always just it's not one thing. It's another.

Chase Leavitt

It was cement, not cement but the material inside the cement. The resin.

Steve Olson

Because some factory in Dallas froze during the Texas freeze.

Sherida Zenger

One of them burned down. So one of the factories burned down and then the one in Dallas froze. Yeah, it was it's called Sutton fly ash is what it's called fly ash.

Steve Olson

And then, you know, we got clobbered in Texas, too. We've done a fair amount of work in Houston when the big Texas freeze happened, right? All these water mains that come up out of the ground froze and the valve snapped. And the water was spraying everywhere.

There are some apartment complexes, I think in Texas that are still struggling with water because all of the sudden, everybody needed this one valve, right? So we had to get it. I think we shipped some down from Utah, we immediately went to the hardware, the plumbing supply place, got these valves, and sent them down in a suitcase with one of our developer team who was going down there anyway.

What you have to realize too, is a lot of builders are on an allocation right now they basically rationed some of these materials, we've gone so far as to put trusses on a truck from Utah and drive them up to Idaho, and use our builder allocation here to send it to another state. You got to be creative. Supplement wherever you can.