Need Help Tweeking My Process

[James Zettelmeyer]

Hey Everyone!

Hope all is well! I need some help, but a little background first. My wife and I have four rentals, and have just completed our 4th flip. Have learned a lot along the way but at this point, we have strong working capital, a decent crew and a good base of knowledge that we are ready to start scaling up to a couple flips a year. Right now our focus is on flips as we want to get to a point where we can do 5 or 6 a year consistently. Once we have reached that point, then we'll roll those profits back into buying rentals. That said, I still have a ton of things that I need to get better at which I wont be addressing all in this post, but I do at least want to start with my two biggest issues: Contractors and costs.

So on our first 4 flips, I have used the same group of contractors (no gc, i handle the management). My main guy is very cheap, does good quality work, but is slow, rarely does a full 40 hour week. Project gets done but can take a month or two longer than it needs to which costs money, even somewhat offsetting his cheaper cost. My plumber and electrician are great, do excellent quality work and do it quickly, but are getting expensive. Moving forward I need to start getting other quotes and Im looking more towards GC's than managing the crew myself. I have my own mortgage company so between that, family (3 kids) and my own projects at home, I am running out of hours in the day to manage this stuff on my own. I have connected with a couple GC's that I feel are reputable and are used by some other investors that I know so I feel any of them will follow through with decent quality in a timely manner. That said, Im trying to figure out what my process should be with these guys as Im looking for homes.

I have a vague idea on some of their costs but I really dont know exactly, so should I bring one of the GC's to a house that I am looking at to see if my budget is close? If so and I actually get the property, do I still shop the guy out? Thats a point that Im struggling with because if I ask a GC to go look at some properties with me, then purchasing one of them based on his info, but then telling them to give me their best number as Im getting 3 other quotes seems wrong to me. At that same, time if Im not getting other quotes, I dont know if I can do better on the cost. That said, if thats exactly what I need to do and how everyone does it, then just tell me to suck it up and that'll be that.

Or, do I try to get a solid break down on costs between a couple contractors upfront so that I can somewhat accurately underwrite properties without dragging them along to a bunch of them? Then once I get one under contract, have them all bid it out.

Regardless of the above, when it comes time to bid it out, do I provide a detailed scope of work to them that they can base their bid on? Or do I just let them send me their bid based on our walk throughs? My thought has been that after I acquire a property, Ill walk it 2-3 times to get my scope ironed out as detailed as possible to make sure everything is covered that I want done, then provide that to the GC's to bid on so that their is no confusion or items missing and in theory should reduce time needed to get a bid selected as there should be less back and forth to get it ironed out with the contractor.

So this is my dilemna for today that Im trying to get a handle on. I would love any and all feedback. Thanks again!