Local Lumber Company Contract

Jake

Has anyone worked with a local lumber yard where an agreement/partnership is made to use them for all of the materials and supplies for a given project? I have a business opportunity to create a site condo/subdivision where I would like to contract and build several spec homes a year. If I could use them as a local supplier I can not only work out a discounted deal but also use them as an advertiser to get the name out of our business and building lots. They are located less than a couple football fields from our land to delivery is not an issue. I want to use them to help the local economy.

My main question is how is the best way to approach this and what pitfalls I need to avoid. Also if anyone has done this before. Thanks in advance.

Jake

Grumpy

Jake, I've never done anything like this before but it never hurts to try. How can you approach this? Call them up and ask for their business manager then pitch your deal. "I'm building 3 spec houses down the street from you and want to exclusively use you for all my material, but I'd like to work something out. Hopefully you can give me some good pricing and some referrals for more work when these 3 are done. Also I'd even let you put up signs on the properties saying materials supplied by xyz lumber."

Jess

I send out excel spread sheets to my lumber suppliers after I present my project plan to them (usually sales mgr) - they give me prices good for the phase duration of the project, ie; 6 months is typical for framing, 3mos for concrete, 6 for trusses. I also include an escalation clause in my contract with the homo ( they are responsible for any increases over 2% beyond the price guarantee limit on my suppliers bid proposal). Some owners can't make decisions in less than 60 days????????? I qualify most general conditions(Division 1) with "based on 120 working day schedule". This is generally Exhibit B of my contract. Plans & specs - Exhibit A.

I always try to coop my signage and include that in negotiations with my suppliers - ave job sign is $200 - give them 1x2' of 4x8 for $50 after they've submitted their bid.

Go gettum guys

jmic

I did a 13 Lot subdivision about 7 yrs ago and went to lumber co. and told them I wanted good pricing and would give them all the materials soup to nuts then said by the way I don't want to pay you for the Model Home materials till the last house sells or 1 yr. They agreed, I paid them 12 mos. later for the model package plus 4%, and they gave me good pricing and great service. Win - Win!

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Joe

Jess

I'll try that!!!!!!!!!!!!