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How Building Materials are Delaying New Construction

build-to-rent podcast market research Oct 09, 2021

Building materials are often still hard to get in today's economy. Why is that and what challenges should you expect to face during the build process of your investment property?

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


Another area for your build-to-rent project getting delayed is a lack of building materials.

If it's not one thing, it's another Chase. What's the big pinch point right now that you're hearing about?

Chase Leavitt

It was lumber but not just lumber. Trusses. Floor trusses, roof trusses. The little brackets that build or put the trusses together. Piping or plumbing. Paints.

Steve Olson

I had a flooded my basement. And I learned there's a massive baseboard and trim shortage.

In fact, our builder team has been mixing and matching between units, right? Obviously not within units. But in one property, you might have different sets of trim across the board. And paint is extremely difficult, difficult to get.

Hardy board, right. I was comparing it earlier hardy board is kind of like prescription drugs. There's the name brand, that's a bajillion dollars. And then the generic one that's like two cents a pill. And that's how hardy board is.

And right now we're only able to get the name brand already, but I don't know what the brand is. But that's more expensive. Right? So materials across the board. For a while there was OSB plywood was a big problem that seems to have loosened up. lumber has come down. It's still way high.

Sherida Zenger

But let's clarify that. So people have said, You know, I know in a couple of our projects, we had to have a price increase. And part of that was because of lumber. That was one of the major issues and others were like Jason said, you know, piping and conduit, all that fun stuff. But the trusses are lumber.

It's come down, but what's still on the lumber lots like what the yard still have, they're clearing through having to pay that price for it. So people are not seeing that price drop not in a meaningful way. You know, but people have said, Okay, well the numbers drop. So are you going to change your prices? No, because other things have gone up?

Steve Olson

Yeah, it's if it's not one thing, it's five others.

It's another that this supply chain disruption through the COVID lockdowns is astronomical. It's a problem. Right? So let's not do that, again. I got a little too opinionated there.

But I was recently up in Nampa, Idaho, and one of our projects and there was a particular multifamily building where I knew we were up against the deadlines on the contract to deliver a certificate of occupancy by and they didn't have any exterior on the building. And they had a lot of interior work done.

But why are they not putting the exterior and there's this hole cut out of the second floor towards the back of each of these units. What's with the whole guys, we can't get bathtubs got away, then we're gonna lift these bathtubs up on a crane, put them in, then we can seal up the unit. I'm like, why did you do that? Well, we couldn't just do the rest of the unit.

We had to move forward someway somehow. So these projects and these construction deals are moving in fits and starts, like when you're driving by a construction site and you're going why is that taking so long? There's a reason they can't get something. And that's typically what's going on.

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