Hiring a GC vs. Managing Subs, what’s Better?

Question

Hey everyone!

Do you guys prefer to bite the bullet and hire a full General Contractor (GC), or do you step into that Project Manager (PM) role yourself and just manage the subcontractors?

I get the obvious trade-offs. GCs make life way easier but man, that 10-20% fee hurts the profit margin. Managing your own subs saves you a ton of cash, but it basically eats up your life with endless scheduling and coordination.

The thing is, it's not always just about the money. A lot of the time the hardest part is actually finding a good GC you can trust. We've all heard the nightmares about GCs who disappear, pad the schedule, or do sloppy work.

So what's the verdict for your projects? What has worked better for your bottom line and your sanity? Are you Team GC because you need the time back, or are you Team Self-Manage because you want to keep that extra 15%?

Peter Mckernan · Answer

I have done both.... It really is up to you, but what are you doing for your day job? Flipping and doing remodels, then do it all yourself and sub out. If you are working full time, I would give the full project to a GC. There are so many things that need to be done, onsite trips, QC stuff and more that you will miss if you are not doing this by driving over and checking out what is going on.

The other day I was subbing out a project (cost way more than expected even subcontracting it out), and the guy doing the bathroom window did not level it. I was not there luckily the electrician called me about it, if not they would have drywalled it in like that and kept going. Things like this can set you back a ton of money and time.. A GC would catch this stuff, or if not pay for it if they missed it.

Scott Chilton · Answer

I have used both setups across different projects, and what I found is that the better choice usually comes down to how much time you can actually give to the job.

A GC costs more, but a good one keeps the work moving, solves problems before you even hear about them and saves you from juggling people all day. If you have a busy schedule or the project has a lot of pieces, paying for that smoother ride can protect your profit more than it hurts it. You are really paying for fewer delays and fewer headaches.

Running the project yourself can work really well too, but only if you have the time and patience to stay on top of every detail. It is not just scheduling. You need to check in often, make decisions quickly and deal with surprises. The benefit is that once you build a small group of subs you trust, the work gets cheaper and you gain a lot more control.

If you are deciding which way to go, think about how much extra room your deal has and how much of your own energy you want to spend. Pick the option that lets you finish the job without slowing yourself down or adding stress you do not need. Either path can work as long as it fits your current season.

Bruce Woodruff · Answer

As a longtime GC, I'll say (of course) 'hire a GC'... The 15% you expect to save is not always there. Most good GC's will be able to get Subs and Materials at a discounted rate that you will never get....so the actual cost to you may be close to the same.

That way, you don't have to: 1) deal with the Sub's crews (you don't know anything about the trades and can be taken advantage of easily), 2) Deal with City Inspectors - they hate dealing with homeowners/Investors, 3) assume any liability for faulty work , 4) worry about Lien Releases and stuff like that, 5) Verify that all subs have Liability Insurance/Bonds/Workers Comp, 6) be involved with materials...picking up, storage, warranties, liabilities, etc....

Your time is better spent running your investment business - find a new property to flip, keep your books in order, etc. You'll make more money that way.... :-)

Jason Garriga · Answer

Hey Doug, great question. Managing subcontractors is absolutely the way to go, as long as you have reliable crews. It only becomes time-consuming when your subs aren’t experienced or consistent. With solid subcontractors, management is often as simple as sending out scheduling emails to let them know when their portion of the renovation begins. And as you stated, you save a ton of money on the back end and you have way more control over timelines without a GC being involved.

Hope that helps!