How to Build a solid Fix and Flip team? (general contractors, plumbers, electrician, etc.)

Question

I wanted to ask for everyone's experience or input on what the best way to go about building a solid and trustworthy fix and flip team would be.

If you have developed your own team, what were some of the steps you took to develop the team? Who is on your team (GC, plumber, electrician, etc.)?

Feel free to share good experiences, bad experiences, and/or put forth any information you think would be helpful to new or even established investors looking to build a team instead of relying on multiple contractors and specialists.

Kathryn C. · Answer

It depends on your ability both financially and your skill set as a GC.  If you are only financially able to do one property at a time or that is all you want to do then it is in your best interest to be your own GC provided you have the know how. If your goal to to set up a production style operation where you do multiple properties you will want to hire a good GC as it will cost you more in lost revenue than the money you save by not paying a GC.

If you do decide to be your own GC here are a few tips:

- Find an HVAC tech that can do side jobs for you on most things.  At least around here the techs are the ones that do all the work and the licensed HVAC contractors just pull the permits.  Be careful though as there are some instances where you will want the licensed HVAC service professional to be involved for insurance purposes.

- Buy your materials from surplus warehouses (if available).  We just re-roofed a property and saved over 50% on materials.

- Drive around new developments and find roofing installers, brick layers, etc.. These will often be the crews that work for the subcontractor and will do side jobs at a substantial savings.  The down side is they usually do these on the side so it may take longer to get it done. Don't be penny-wise, pound foolish and end up spending more in carrying costs than what you saved waiting to get the job completed.

- Buy the materials yourself and only pay the subs after the work is complete.  Let them know you do not pay for partial work so if they don't complete and you have to hire someone else they will get nothing as whoever else you hire will not warrant the work that has already been completed.

These are only a few things and undoubtedly you will have a contractor issue eventually but these few things should help you minimize issues...

Arlan Potter · Answer

It sounds like you are going to do a lot of flips. I personally have always been my own GC. I monitor and hire subs to do the work.

I see posts on a regular basis about building a team. I never really had a team.

I am the GC

I have a couple of realtors that know My business and feed me deals.

I have come to use one attorney for my title work

I have used the same painter for a while

I have a couple of carpenters for repairs.

I bid out the roofs.

I have one HVAC guy that I like to use

I also use the same electrician, he is a pain but I like the guy.

My team is fairly loose because each sub doesn't make a living off me. They do make some money,  but they are not exclusive.

PS  I always thought of a GC as a guy that makes 10% for telling me what I already should know, and doing what I can do myself just as easy.

Kyle Kelley · Answer

@Arlan Potter  Thank you! That's exactly the kind of input I was hoping for.

I should have also clarified a little more, that yes, this would indeed be for a time when I plan to have many fix and flips going at one time, or enough lined up in order to keep these subs specifically with me and allow them to earn enough money that way.

Essentially I would be wanting them to be an employee of my own - but I feel that could be touching on a slippery slope by hiring them as an actual employee - does anyone have any experience hiring subs as employees to work solely on your properties? Or would it be more wise to keep the subs on a job by job basis?

My thinking in all of this is that it would be easier to get a stronger commitment and less "corner cutting" per se if the sub knew they were going to be steadily compensated and did not feel the need to nickle and dime me here and there.

Thoughts?

Kelly Sennholz · Answer

If you want to hire a general contractor, get the names and numbers of the last 3 deals they did. That way, you can speak with them and get great, pertinent information. Ask a lot of questions, then be quiet and listen. People will love to talk about their flip, let them. The last contractor I hired had some shortcomings. I was told by reference to make sure all is done before check is cut. Of course, but that did end up playing  a part as he underbid, ran out of money before job complete and bailed on some detail work. Cost me $2000 more, still a great deal but clearly the man is not a man of his word. We could have worked it out, but he just bailed. I could give a lot of examples, but the fact is, even with a GC, you will have to keep your nose in the job as much as possible. Shoddy subcontractors, substituting poor quality materials, etc etc are commonplace. Very hard to find people of their word. If you find one, treat them like gold.

Kyle Kelley · Answer

Thanks for the reply @Arlan Potter

I was thinking more along the lines of hiring a GC as an employee and relying heavily on them. Obviously I would like to have some knowledge of it and would pay close attention to the estimates but was looking to rely on more of an expert in the area.

I guess I also am looking for recommendations at to exactly what types of subcontractors would be most beneficial to have on the team? I would think electrician and plumber would be two to have on hand/on staff for just about every fix and flip property, any other subcontractors that are used in almost every scenario?

And/or what subcontractors are used sparingly that could be hired on a case by case basis (roof/HVAC, etc.)?

Arlan Potter · Answer

Be your own GC, get good estimates and watch everything that goes on. Learn.

Hire subcontractors as needed. Do as much as you can yourselves to learn.

How to Build a solid Fix and Flip team? (general contractors, plumbers, electrician, etc.)

Most Popular Reply