Logistics

By Richard A Balch CFP, CLU, ChFC

This is my eighth article on following a financial advisor’s decision to purchase a rundown house next to his office building and convert it to a rental. Feel free to read my earlier articles. 

My clients are complaining a lot about shortages and inflation these days. The price of lumber recently hit an all-time high. There are no appliances available for immediate purchase. The buyers are on a bidding war when a home is listed on the market. It seems that as the pandemic has subsided and people’s pockets are lined with cash from not spending it last year – thus creating a spending spree now.

I have been lucky that I have kept ahead of this tsunami. I bought my rental in November last year before the prices sky rocked. I was able to get my appliances right away from Menards. I was able to re-use some of the lumber in the rental to avoid purchasing it. But now the effects are starting to catch up.

From my last blog entry, I redid the tiling in the kitchen floor and was stuck trying to get old linoleum off the sunroom floor. For the sunroom I spent many hours chipping away the old linoleum with a hammer and chisel. A neighbor looked in the window one day and took some pity on me. He lent me his industrial pneumatic chipper tool which allowed me to quickly remove the remaining linoleum. Afterwards I painted the floor and then waited. Summer came to Wisconsin. I want to be outdoors mowing the lawn and doing yard work. So, the beautiful sunny days became weeks and finally I forced myself to attempt laying down the luxury vinyl tile in the sunroom.

I discovered there was a trick to laying down the luxury vinyl tile. I learned to carefully angle the tiles at two directions to allow the interlocking to work on each side. Sometimes I needed to use a block and hammer to get the two edges to lock in place. Once I mastered this trick, I immediately tiled the rest of the sunroom – at least almost all of it. I ran out of tile and was fifteen tiles short! I had made too many mistakes on the kitchen tiling project and squandered way my valuable vinyl tile supply.

I went back to the flooring store to order more of the same luxury vinyl tiling and was met with a grim-faced store owner who said the tile was out of stock and it may take twelve weeks to get a new batch from China. Also, the Chinese factory had outsourced some of the tiling to Vietnam and they used a different interlocking system for the same model tiles. Although I was briefly despaired the store manager continued typing away on the computer like an airline flight attendant desperately seeking to rebook a flight and found one box of tiles (12 in a box) located in a warehouse in Milwaukee. She told me the warehouse would charge $75 to ship it to Green Bay at which I told her I would drive to Milwaukee and pick up the tiles myself the next day. I did this and accomplished a sales call in the area as well.

After picking up the tile I was able to complete 98% of the floor. I still had a 14’ x 3” wide gap of flooring to cover. I did also have a scrap pile of tiles. I went through the scrap and was able to carefully construct the last 2%! My industrial engineering problem solving skills from college paid off.

With the flooring complete all I have left is the base trim. I need to paint and cut the trim for the bathroom. kitchen, and sunroom. I also need to remove the wall AC unit since I have central air installed and patch up that hole. The ceiling plastering puffed out in an area so I will need to resolve that as well. I can feel Phase One completion soon.

That leaves me to determine Phase Two – the exterior. I measured and hand drew the exterior of the house. I have been playing with different design ideas to include vertical vinyl siding, horizontal vinyl siding, and even repainting. I am unsure what the vinyl siding supply issue is like, but I suspect that is also in short supply.

When I was in the navy, I heard a famous quote that resonated with me throughout my career. Admiral E.J. King in World War Two was quoted as saying: “I don’t know what the hell this ‘logistics’ is that Marshall is always talking about, but I want some of it.” I feel the same way. Happy Father’s Day.

Richard A Balch, CFP, CLU, RICP

Woodmen Financial Resources

1234 S Ridge Road

Green Bay, WI 54304

1-920-499-8833 Ext 11

[email protected]

Securities and Investment Advisory Services offered through Woodbury Financial Services, Inc.,

PO Box 64284, St. Paul, MN 55164(800)-800-2638 Member FINRA, SIPC

Woodmen Financial Resources and Woodbury Financial Services, Inc. are unaffiliated entities

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