Rehabbing Cost & Contracting

10 Replies

hello-

I'm considering my first 4 unit fixer. When considering who should do what on the project. Should I have a general contractor do everything from A-Z or have them only do interior/exterior work and have specialists do the other items such as plumbing & hvac?

Many subs are capable of your A-Z stuff including electrical and plumbing. HVAC is an exception because handling the refrigerant requires a license to buy and handle but many can still run duct work and set up the units.

Basic definition of GC is from A-Z. If you are hiring subs, then you go subs all the way, why do you need a GC? If you're not planning on owner builder, then you don't need a GC. If you hire GC plus sub, then if something is screwed, they would give you the run around that it is not their fault, if you go with all subs, so plumbing issues will have to be fixed by a plumbing company, etc. Better give them all the headache, that way, you only talk to one person.

@Manolo D.

 @Jassem A.

Okay...so...let's say I found a sub who can do the work and he says he works under a contractors license. What do i need to do to make sure he's liable for his work? Get the primary contractors license & insurance and signature on the SOW agreement?

@Xavier Randall

Do you have experience managing a construction project?

If you hire subs directly, you will want to put together a schedule and make sure you have the proper workflow.

An example of what I think Manolo is trying to say:

You need a new A/C unit and new electric service to it.  The A/C does not work.  The mechanical contractor blames the electrical contractor who blames the mechanical contractor.

If you had a GC, you let the GC sort it out.

Second Manolo D. comments. The purpose of the GC is to find and organize the subs, as well as provide the general labor. If you bring on a GC, let them do their job, organize, and deal with the risk and headaches. Incidentally, I HAVE worked with a GC where I specified that a certain person would do a certain trade. Wouldn't ask that if it was a high liability area (like plumbing or electric), and I wouldn't appreciate it if the roles were reversed, but it's possible if you want to do some of the work yourself, for example. Manolo D. Will probably slap my hand. ;)

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@Xavier Randall

Not sure, I typically self-insure and have people I trust who help me regularly but mostly on weekends.  They do everything except recharge AC.  I also work with them on the weekends sometimes or do some projects on my own.  I'm pretty capable with most repairs but if I had to do everything myself like I used to, I wouldn't have much time for family.  Of course this kind of scenario is not as easy for flipping if you are working under rigid time constraints and have to get the property fixed and sold fast.

As mentioned in the previous posts, in most cases the idea of having a GC is to hand off the project management, responsibility for finding and managing subs, and procurement of materials. Assuming the GC is competent and has worked in the area for awhile, he should have a team in place that he or she is comfortable with, and will be able to provide predictable results. Upsetting his apple cart will quite possible do the same to yours. On another point, as the license holder and the one who pulls the building permits, I am VERY, VERY particular as to who works under them.

To me, the size of the project has a lot to do with how to handle it.  If it is simply carpet, paint, and an update to the kitchen for example, I will hire those jobs to various subs.  If however, It is a complicated rehab, I would rather hire a GC to organize the work.  They will make sure you don't do the drywall just before the plumber comes in and has to tear out a wall to install a pipe.

Originally posted by @Xavier Randall :

@Manolo D.

 @Jassem A.

Okay...so...let's say I found a sub who can do the work and he says he works under a contractors license. What do i need to do to make sure he's liable for his work? Get the primary contractors license & insurance and signature on the SOW agreement?

 Avoid the "works under" clause, I have some people approach me to pay $5,000 to use my license for a 25k job, now that's around 20%, and to me, 5k is 5k, but since I don't know the guy, I didn't take it. If I were a GC, and I would sign a contract with you, it is for sure that we have an agreement for the SOW, now, if you want me to take YOUR sub, and put him under my license, there's no chance that I am signing that contract, but, if you tell me you have an electrician, I wouldn't touch electrical and all items that goes with it, plus, I will charge a premium, for "possible waiting time" for delays caused by your electrician. With that said, it would be more expensive on your side. If you have a sub, then the GCs job is to schedule YOUR sub on when he "should" show up for work, and if my guys get delayed because the electricians job is not done, guess who is paying for it? Not me, for sure. And if you screw the timeline, and you say the electrician wont be here until next week, guess what, we have jobs next week too, you will be pushed all the way to the back.

Bottom line for me as GC, your sub will work on my schedule, there is no connection of liability whatsoever between me and your sub, my job is to schedule his work nothing more nothing less.The agreement between your sub and you is your business, our agreement is our business.

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