5 Secrets to Sourcing Quality Cabinets & Flooring Without Breaking the Bank

Mike Hambright (00:01.806)
Hey everybody, welcome back to the show. Today I’m here, we’re in the studio actually with my friend Kevin Hames. Kevin and I, I’ve been using Kevin for a long time for flooring and materials for our rehabs that we’ve done here in the Dallas market. And now he works with investors all over the country to provide products, namely flooring and cabinets. So we’re to talk about flooring and cabinets today. But we’re also going to talk about sourcing products from overseas to help save money for your projects. So Kevin, good to see you my friend. Good seeing you, Mike.

Yeah, we’ve been using you guys. I know you’ve changed your name and brands over the years, I won’t say any of the names. But since you were a couple names ago, I think, back in 2008 is when we started using that when it was? Yeah, yeah. Yeah, it’s been a long time, like 17 years. Yeah. That is a long time. Yeah, yeah. So appreciate you. So I know we’re going to talk about kind of sourcing products. And at the end of the day, everybody’s looking for ways to save money and simplify their business. And I think that’s kind of the theme today is like.

How can you save money and simplify your business? But before we jump in, I know you’ve been a real estate investor. You’ve owned several different flooring companies, some other probably products as well. know you have cabinets obviously as well. But tell us a little bit about your background and how you got into the flooring business and then ultimately how you got into real estate and how you got to basically being, you’re essentially a wholesaler now, right? You’re wholesaling products for real estate investors. Yes, I am. That’s true.

Believe it or not, I bought my first house in 1982 as a real estate investor. All right. I was eight. And I’m an old guy now. So I was eight years old. You’re eight years old. And you probably won’t come across a deal like this. bought 12 houses for $60,000, owned and financed, and no payments for five years. Wow. So you just don’t see those deals anymore. No.

That was the way I got into investing in real estate. But I’ve been in the flooring business. I started in the flooring business in 1987. I had it for 31 years before I sold it to my kids. And we started selling used carpet. Then we went to new carpet. And then we started selling laminate and tile and wood floors. And then we went to

Mike Hambright (02:26.872)
cabinets and countertops. So basically we were a company that could, you could come to us and we could sell you pretty much everything for your house from the kitchen to the floors. So I’ve heard this story before and I forgot about the used carpet once. So I want to come back to that in a second. you, so you were a real estate investor before you owned a flooring company. So did you get into flooring because of real estate? Like you saw the opportunity there or how did that come about? No, actually I was in, I got into real estate and I had those

12 houses I bought, but then I started flipping. And so I got into flipping and then in 1986, when the market crashed, I don’t know when, did I say I bought my first house in 1981? Or did I said? You might’ve said 82 or. Right, it was actually in 1981. But anyway, so then I got into flipping real estate and.

bought my house and fix it up and resold it and say, okay, this can work. So anyway, so then I got to 1986 and I was buying everything I was buying in was red line areas. like imperfect. Yeah. And the, uh, so the, and at that time, the interest rates are so high, the mortgage companies were given out the money. And then of course, then what happened is the market totally crashed.

and I pretty much lost everything. So that’s how I ended up being a real estate investor. So then I started selling carpet, but I got the carpet out of dumpsters. I put an ad in the newspaper to sell it, and then we would start selling it to landlords in South Dallas. So we started making my, that’s how we got into the carpet business. Yeah, that’s interesting.

you about getting into the used carpet business? Well, back in 1982, actually was in the used carpet business before I got into real estate. And what we would do is we had somebody who was in a very high-end apartment complex, and they changed the carpet every five years. So he was saying, hey, if you want to

Mike Hambright (04:53.422)
want some carpet, you can just come and get it from us. We’ll give it to you free. We take it out every five years and it’s still in good shape. So we went ahead and got carpet from them for free and the padding for free. Then we went into South Dallas and said, hey, we’ll install this for you, which they were thrilled. And this is something that is really crazy is that we used to install carpet, padding and installation for $3 a yard. So it was, mean…

But we make good money because it was all free. So anyway, so that’s how I got into used carpet. So then when the real estate market crashed, I thought about getting into used carpet again. So that’s then I got into used carpet again, started selling it. Then I expanded to where we.

there was a carpet company that had a distributor that had a sale every year of seconds, of carpet seconds. So I went to there and it was like, you know, there was this huge 60 ounce plus carpet I could buy for $4 a yard. And it was like, oh my gosh, this is crazy. So I had shortly later a lady contact to me and she wanted some carpet and she was willing to pay eight bucks a yard. And I said, hey, I think I know.

I think I know some carpet you might be interested in. So she met me out at the distributor. We pulled out that roll and she said, this is perfect. So I bought it for four and sold it for eight in the same day. And I was like, okay, we can make money doing this. So we got out, started gradually getting out of the use and getting into more and more of the seconds carpet and drops and overruns, basically buying discount carpet. And then we expanded from there into laminate wood and everything else.

Yeah, you sound just like a real sandwich, just a hustler. Yeah, yeah, it was. Yeah. So let’s talk, because I know you’re going to know this well, talk about what, a lot of people are complaining about the interest rate environment today, but talk about what that looked like in the 80s when you were getting started. Well, just to give you an idea, the first house I bought to live in, I had a 17 % first and a 20 % second to get into the house. Yeah. But I think the house is only like,

Mike Hambright (07:09.774)
45,000 a lot cheaper a lot cheaper and my payment was like 750 or something like that and I can make that work So yeah, even though the interest were high because of the real estate price. It was still manageable, right? But it was crazy. Yeah. Yeah So one of the things I know about you Kevin is you’re very generous like you a lot of things you do now are to support Your ministries and things like that. Why don’t you share a little bit about like why you do what you do now and how that purpose for you know

Like I just talked about this in another podcast. like you have to, a lot of times when you have some level of success, it’s easy to get complacent and you have to kind of tie your goals to somebody else or some impact or helping other people. Like kind of share your thoughts on all this and why you do what you do. Okay. So in

In 1987 is when I became a believer and we just committed to it. We would run our business with biblical principles, treat everybody right. And then we also would, I gave a hundred percent satisfaction guarantee, you know, whatever the customer wanted and I would give it to them. So, and then we started a, a charity where we gave free flooring to needy families. So we would give it to the elderly families and fixed incomes.

single moms and generally people who were very poor health. So we just started giving, we got up to where we were given away probably about six or seven houses a month.

So, because the one thing that the Lord has always said to me was that if you have a need for somebody, I’ll provide. And that’s what he talks about in scripture. so then, so we’ve always been giving company and running it on biblical principles. Then when I sold to my kids in 19 or 2018, I no longer had that income coming and I’m in…

Mike Hambright (09:11.0)
I had sold a business, so I had some money. So I sought the Lord as far as what should I do now to raise money. So it was to expand the cabinets and the flooring business. So now the purpose of our company basically is because I’m technically retired, but still working, right? So what I do is, so the purpose of the company now, because I don’t need the income because I’m retired, is to raise money for ministry.

and it’s either to expand the kingdom or help the needy. So that’s the purpose that we have this company. Yeah, that’s awesome. That’s awesome. That’s great. Talk about maybe for folks that are kind of get stuck at some level that don’t have like, they’re not thinking bigger than themselves. Like they’re just trying to, you know, build a business, but they kind of hit a level and they just get stuck. Like I’ve kind of found

if you tie your goals to other people and other causes and stuff like that, I mean, maybe just talk about the opportunity that is out there for people that if they feel like they’re stuck is to maybe shift on, you know, consider the goals of impact they can have, how they might help them get to another level. Well, I think the most important for anybody who’s trying to grow a business is the why. Why are you doing this? If you don’t have a why,

then to me you’re just kind of wandering around. So like when I first got in, my why was always to retire early. And the reason that was is so because if I can retire, I’m financially independent where I don’t have to work, then I basically choose what I’m going to do with another eight or 10 hours a day. So my why was buying time, was to get that time. So I think you have to have a why.

that you’re doing something because if you’re just doing it just to make money, it’s not going to last, you know, unless, and you can become very selfish and very greedy. But if you have a why of, like you want to have your, your wife stay home from work or you want to have a family where she doesn’t have to go to work, you know, just where you have a why, I think that’s more, that’s really important when you’re talking about goals. Yeah. Yeah.

Mike Hambright (11:30.678)
So we’re going to talk about sourcing products today. a lot of folks want to sort. I mean, I guess some of the reasons to source are obviously, you know, hopefully save costs, right? Save money. And I think where materials have kind of shot through the roof these days, like everywhere you can kind of save money. It also helps simplify too. If you could use, you know, the same, some of the same products over and over and over again, it’s kind of funny. I mean, you’ve, you’ve known like we’ve known each other for a long time. We’ve fixed and flipped hundreds of houses here. You know, another Kevin, my.

Contractor and there were times where he’d be like hey can we change up the materials because the guys are kind of getting bored with the exact same tile and I like I hope like I just want to keep doing the same thing over and over again so there’s a case for simplicity too of not having to rethink your materials on every single project right yeah yeah so the one thing that because again what I did was after I sold the business I had money so my company that I sold to my kids

They sold a lot of vinyl plank, luxury vinyl plank. And so I made the decision to take some of that money and go to China and find a manufacturer. so we would buy containers and bring it in, but then we would sell it to the end user, which we could sell it at major discount because there’s no middlemen. There’s no distributors, no retailer. Just we could straight to the end user.

So we went to China and we started purchasing luxury vinyl plank. And we’ve got it down to 13 colors. So we have all these colors that we bring in by containers and we sell them to the end user.

Mike Hambright (13:17.998)
So we did that with China, but the thing that’s going on now in China is the new tariffs. So when Trump was in office the first time, for those who don’t know, the tariff on China used to be 5.3%. So when Trump came in, he upped it to 30%. So he added 25 % on it. But we were able to weather that. The manufacturers in China came down on their costs, and we had to go up on our costs.

So he was able to work. But the thing is, is that now that Trump’s back in office and has re-added more tariffs. So now anything coming from China, when he came in office, he initially added a 10 % additional tariff, which brought it up to 40.3. And then as of March 4th, he added another 10%, which is bringing it up to 50.3 % tariff. And then…

he, the rumor is, is that on April 2nd, he’s going to raise it again. So, so we ended up at, have 14 containers that are on the water that we’re going to have to pay tariffs on, but we’ve switched our manufacturing to Vietnam where Vietnam only has a 5.3 % tariff. Okay. So because of that, we’re going to be able to still keep our prices down where they are. So I think the thing to look at is when you’re going out and buying a product,

you know, where’s that product coming from? Because now any company that buys luxury buying a plank and sells luxury buying a plank, and if they’re getting it from China, the prices are definitely going to be going up. Right. Yeah. It’s interesting to think about how that, I mean, I don’t know where, I guess, other stuff made in Vietnam. Like you said, there’s probably some stuff that’s made in Mexico, which they’re about to get hit. in India. Yeah. India. Yeah. Taiwan. I mean, there’s different places that have it. The interesting thing about entrepreneurs is they, they figure that out. Like we just. Right.

Zig and zag and and figure it out, right? So you just move to Vietnam for now and hopefully that’s not as big of an issue and right Yeah, eventually maybe some of that stuff starts to get manufactured here, which might I don’t I mean, I don’t know how that would come I mean manufacturing clearly would be more in the US but it doesn’t have a 60 % tariff on it. So no, I know and that’s just it is that Right now the United States doesn’t make enough vinyl plank for this demand So it has to be imported

Mike Hambright (15:45.39)
Right. So I’m sure it’ll probably increase in the United States. But the thing is, it’s more expensive to make here. Absolutely. There’s no question. Yeah. So I think with the additional tariff, which is going to be at 60.3 % now and coming more in April, they might be able to get close to manufacturing to be able to compete with that. Right. But for us who are going to Vietnam,

you know, still going to be able to offer really good pricing because of that. And like, for example, this vinyl plank that I have here, it’s 5.5 millimeters thick and it has a padding on the back and we have it in two wear layers. We have a 12 mil layer, which we sell for a dollar 39 a square foot. And then we have a 22 mil wear layer, which sells for a dollar 49 a square foot, which is crazy prices.

Because we can ship We can sell and ship this You know anything probably over a thousand square feet we can sell and ship it to anywhere in the United States Cheaper than they can buy it locally. Hmm. like this product right now at Home Depot is like 249 Yeah, so there’s just no compete. So you’re selling for like a dollar cheaper per square foot. Yeah. Yeah, that’s amazing

And a thousand, mean, thousand fifteen hundred square foot house. That’s a pretty good saving. Yeah, it starts to add up. Yeah. So when you when you looked at sourcing, like why did you pick flooring and and cabinets like of all of them? I I know other people that have sourced light fixtures and lots of other things. But I guess a lot of people I told you somebody else in our mastermind just was talking about sourcing and they wanted to do windows and custom doors and stuff like that. Really.

Custom stuff doesn’t make sense to import, right? It’s got to be the stuff that you’re buying by the container load, right? Right. It has to be has to be staple products. know, products that are going to be used every day, you know, in abundance. right now luxury vinyl plank is probably going into any starter home or any remodel that’s under six or 700,000 is putting in luxury vinyl plank. Yeah.

Mike Hambright (18:00.662)
So the thought at time when I decided to import was the fact that this is a product that’s going to, first of all, it was cheaper than anything that was currently on the market. And it was a better product than anything that was currently on the market. So I knew it would sell in high volume. So for example, last year we imported over a hundred containers of this vinyl plank from China. And that’s like three million square feet.

So we sell a lot of it. Yeah. So who’s the right person that would buy this product? You work with a lot of investors. who’s the right person? I guess, who’s your avatar? Is it the rehabber? Our avatar when it comes to investors are, mean, wholesalers we really don’t sell to. But the thing about it is wholesalers sell to investors who

buy and flip or buy and hold. So our avatar is basically the investor who is either buying to flip and generally when they buy, they buy our cheapest product because they’re flipping it. And then people are buying to hold. And a lot of times the buy and hold people are buying our product but they buy the better quality because it’s a rental property. Because our best quality has like a 30 year lifetime, a 30 year warranty and like a 15 year commercial warranty.

where the 12 mil is like a 20 year residential and like a 10 year light commercial. It was interesting to me when I was coming up with our rental portfolio that we started putting higher quality materials in our rentals than we did in some of our fix and flips. And it was simply because we were looking at how do we make this thing last as long as possible. I mean, we were never trying to not make something in a rehab look. we don’t do carpet and rentals at all anymore. We’re doing it.

flooring that’s gonna last a really long time. But we would commonly put carpet in rehabs because it looked nice, it was cost effective, and most people want carpet, but our tenants, like tenants just don’t take care of your property. No, they don’t. Yeah. Usually even with carpet, the tenant will ruin carpet before they wear it out. Because if they get a stain in the carpet, they generally won’t clean it. Right. And we’ve actually gone into houses where they…

Mike Hambright (20:22.83)
did oil changes in a motorcycle in the living room. when they’re rentals, they really don’t care about them. But I’ll almost, think the vast majority of people that I know that are property management or buying rentals a hold, they’re putting in LVP. LVP, it’s first of all, it’s 65 % stone, so it’s very durable. It’s 100 % waterproof.

And your tenant, this is going to get ruined, which is very, very difficult to ruin before it’ll ever wear out. So I mean, this will last at least 10 years before it’ll wear out unless for some reason, like the tenant had a nail sticking out of their furniture and just drug it across the floor and scratched it. But it’s not going to wear out. Yeah. When we use things like that, we typically put

an extra case or two up in the attic. Oh yeah. If we have to come back to like replace anything. Right. So yeah. So your avatar, who you work with are the rehabbers and landlords, I guess, people that have a lot of properties that just, I mean, I know for, I’m not sure if it’s quite this way anymore because I don’t manage my, we don’t manage our rentals, but we try to use same paint colors, a lot of the same things over and over and over again. Cause if you have to have to come back and do it, you want to have backups to. Well, yeah. And you’re right. That’s what

Well, the thing is that our customers generally only order one color. Because they’ll order a color that they like, and they’ll just keep ordering and ordering and ordering because what they don’t use on this house, they just take to the next Roll it over to the next one. Right. So generally, every once in we have somebody might order two colors. Might order a gray and then a beige. most of them just order one color.

When people buy this from you, you’re buying it by the container load, so how do they, what’s the smallest order they can get? are people having to buy, do they have to buy container loads from you and store it and all that? No, they can, I mean, generally, we usually sell all of our sales are generally for one house. So, but the problem is if we’re shipping it across the country and we ship less than a thousand square feet,

Mike Hambright (22:45.646)
the freight cost is going to be a lot higher per square foot. right now, if somebody buys around a pallet or 1,500 square feet, we can ship it to the Northeast for about $0.40 a square foot. We can ship it to Florida for like $0.30 a square foot. California’s like $0.30, $0.35. Washington’s like around $0.40 or $0.50 a square foot.

So, but the other thing about us is because one thing that we have here in Texas is if we sell a product out of state and ship it out of state, we don’t have to charge sales tax. So that’s a saving that person locally saves. like if we ship it to California, it may cost 40 cents for eight if they buy the $1.39. So they’re getting it delivered to their house for $1.79 square foot and they just can’t buy it.

that price locally. Right. Yeah. And I know, by the way, you brought that kind of sample book here for those that are watching here. You’ve got a book. And if you’re listening, you can’t see this. You’ve got a sample book of you said 13 different colors. 13 different colors. that because of the original 13 colonies, Kevin? Or is that just coincident? Okay. It’s like we decided on so many colors and we then it’s like, then styles changed. Yeah. Like now it’s pretty much earth tones again.

Yeah. And maybe a taupe color, which is kind of a gray and an earth tone mix. like, you know, when we first started, everybody wanted gray. Right. So, you know, so we had to bring in gray and we brought in earth tones. But then now we had to add two new colors that were just earth tones. Yeah. You know, so but what we can do is if anybody’s interested in getting one of these strap sets, you can send me an email, you know, to Kevin at servant flooring and cabinets dot com. And we can just ship you one of these for free.

So then you would have the samples that you can just order off of. And then all you have to do is contact us through email to be able to place an order. OK, that’s great. Yeah, know you and I, we’ve worked together for years and years, and we’ve relied on you for, honestly, I think most of our flooring over the past 17 years. And you’re a sponsor of Investor Fuel as well. And so I know if we can kind get the message out, we can help our listeners save money and work with somebody that.

Mike Hambright (25:07.79)
you know, has a higher cause and also just does what they say they’re going to do, which is kind of hard to find these days. Right. Yeah. So you talk, by the way, you also do cabinets, right? You do, uh, they’re, they’re, um, you assemble them on your own, right? They’re white shaker cabinets primarily. that what you? Yeah, we, we only import white shaker cabinets because as of right now, and pretty much for the last decade, white shaker cabinets are going to 70 or 80 % of houses. Yeah.

whether it’s a remodel, whether it’s a new starter home build or anything like that, the shaker cabinets, white shaker is the only thing that in. So that’s all we stock. And the reason we stock that is it costs about a million dollars in inventory to stock all you need of all the different sizes. There’s probably about 140 skews of different types of cabinets that we have to stock to try and help everybody. So the cabinets come in a box.

I mean, if you’re locally here, local here, we can assemble, but otherwise we ship them by in the box to the customer. And they’re very simple to the basic cabinets, the uppers and the basic bases are pretty simple to build because they’re just, they just all slide together. They’re all dovetail. So they slide, slide together. And then, and again, if we ship out of state, there’s no,

there’s no tax because you’re out of state. and the thing about it is we can do renderings. If you have a kitchen, you just have dimensions. We can do renderings. It’s a cost of $95 if you buy, then it’ll be a minimum amount compared to the entire purchase. we can do renderings which will.

send you a 3D kitchen drawing of the cabinets. And then we can do any size kitchen because, you the cabinets all come in three inch increments. So like you have a nine inch cabinet, 12, 15, 18, 21 on and up. But we also have fillers. So like if you need, let’s say you need an area that’s 50 inches long, well, we can put up cabinets by three inches, which will get you to 48. But then you

Mike Hambright (27:31.842)
we can put a filler in for the last two inches. So we can get build to any size. these are all, I’ve seen these, I mean the first time I saw them I was so surprised. They’re pretty high quality, but they’re all solid wood and they look really good. They’re all solid wood. The boxes are made of plywood and they’re painted oil-based paint from the factory, both inside and out, which most cabinets as you see that are ready to assemble, the inside is a wood tone. It’s just pretty plain on the inside.

But ours are white, which makes it kind of an upgrade. Also, door fronts are the front of the cabinet. The doors and the drawers are all made of birch. So they’re all solid wood. The drawers are soft clothes. They’re full extension. But then when you shut them, they’re soft clothes and won’t slam. And same with the doors. And we have all kinds of cabinets up to Lazy Susan’s pantries, oven cabinets.

Pretty much anything you need we can get. Yeah, that’s awesome. any horror stories, Kevin, of shipping stuff in? I can imagine when you got containers of stuff coming across the ocean here. And of course, there’s a, mean, we don’t have to get into the political side of it, but there’s a bunch of change going on. Tariffs, you got the Panama Canal stuff going on, which I honestly, think a lot of these things will be good for us in the long run. It doesn’t seem like it sometimes right now, but I’m sure you’ve got some.

I know there were shipping delays during COVID. You got to some horror stories in here about having a bunch of money floating out there on the ocean.

So during COVID.

Mike Hambright (29:12.238)
During COVID, we really cut down on the vinyl plank that we bought because we couldn’t afford it. And there wasn’t the sales there because of COVID. But then after COVID ended, we started manufacturing back up and started selling again. But a lot of the products that I brought in already had pre-sold. So normally, we were paying about $30 to $35

$100 ocean freight for a 20 foot container. Well, by time all said and done, it peaked out at like 15,000 a container. So during that time period, lost a lot of money. That’s because the shipping yards were closed or all the transportation issues. I think it was mainly because, you know, basically China opened up again. During COVID, there wasn’t very much being shipped from China. So when China opened up again, everybody placed all of these orders.

Well, they didn’t have enough containers. So they were limited on the amount of containers that could ship. So what do they do? They just increase the price on their containers. This is what we’ve got to have now, supply and demand. So then once all the rush of material came back and started getting caught up, then now the price of freight is back down again. So back down to where it was? I know there’s the tariffs and all the other things going on. We’re down to about $4,500 now, which is OK.

Okay, so if folks wanted to source stuff obviously they can buy you know I mean you have the scale to you doing a hundred containers so you get more scale than what other people would but Anything that people would want to source on their own they should look at Stuff like yours cabinets for him maybe ceiling fans and plumbing fixtures and stuff like that that they that they need a ton of a ton of I guess right and the other thing is if you’re going to source from overseas To get the best deal you have to buy by the container. Yeah, and the smallest container you can buy is

20 foot long. So, people who buy, who source overseas for investors would be like people who are buying light fixtures, ceiling fans, door hardware, all the incidental stuff. I you’re not gonna be able to source lumber, but the thing about it is you’re gonna realize this is coming over in large, massive quantities. Like for example, a container of cabinets for us,

Mike Hambright (31:39.542)
is about 700 boxes of cabinets. And it’s all different sizes. So the hard thing about sourcing windows or doors is the fact every house is going to be different. And you got hundreds and hundreds of styles of doors. And you got lots of different windows. And window sizes are all different. if you’re going to source overseas, you really need to source something that you can use in every house, like plumbing fixtures.

like we talked about ceiling fan, fixtures, doorknobs, is something that you’re going to be able to use. First, you’ve got to have someplace to store it. And then you’re going to have to use it. So you’re going to have to do 40, 50 minimum houses a year to be able to afford to do that. Yeah. Awesome. Well, so tell us one more time, Kevin, if folks are interested in learning more about your flooring options and your cabinet options.

You want to just email you and what’s the best email address again? The best email address is kevin at servantflooringandcabinets.com.

Awesome. Well, thanks for spending time with you today. Always good to see you. Good seeing you. The one thing I wanted to say is that by us importing cabinets, and actually we get our cabinets now from Vietnam already. So the terrorists infect that. But our prices are probably going to be 30 to 40 % cheaper than Home Depot just because, again, we buy it by container and sell it to the end user. Right. Right. That’s awesome. Yeah. Awesome. Well, thanks again for spending time with us today. Thank you. Appreciate it.

Hope you got some good insights from today. If you’re interested in working with Kevin, I work with him personally for 17 years now across hundreds of rehabs and kind of keeping our rentals up to snuff and all that stuff. So he’s a fantastic resource for those of you that are members of Investor Fuel. You know him well because he’s been around for a long time. And if you don’t, just wanted to introduce my friend to you guys. hopefully you got some good value today to learn about sourcing, how to simplify your rehabs, especially if you’re doing a lot of them or you have a rental portfolio that you want to kind of be uniform and.

Mike Hambright (33:49.014)
simplify the process of keeping them all kind of looking roughly the same and simplify the maintenance process. But I hope you got some good insights from today. We’ll see you guys in the next show. Thank you, Thank you. Perfect. Awesome.