I have flipped 3 properties so far this year. 2 have went great and 1 not so great. I work full time and would like to rely on a general contractor to manage the projects but I just can not seem to find one that is motivated to get work done on time and up to par. The 2 projects that I have had success on I GCed the whole job myself. The downfall is it is time consuming, did not meet rehab timeline, and it is not ideal when you are trying to scale a business.
I am looking to close on 3 more deals before the end of the year.
Would you look for other GCs ? Would you just GC the jobs yourself ? What makes you successful when you are running multiple projects at one time and can not be on the job site everyday ?
All advice is welcomed !!!!
If you GC yourself, you're getting into the construction business. Do you want to be in the construction business?
GCing a project is, I think, pretty incompatible with having a full time job... Running subs, getting materials, etc. IS a full time job... or even a full business unto itself.
I think @Aaron McGinnis has a point. It's a big commitment to do it yourself (as you already know) but it's not that difficult. You do have to understand project management. A GC is an expensive cost to your bottom line.
If you are looking to make more of real estate then a pt job then you will have to figure out how to work on the business and not in it. To make any business bigger then it is you have to hire out the functions that others can do and only partake in the necessities.
It might help to think of a highly skilled GC, as you do a hard money lender. They're expensive but if they're good, your project flow will increase as will your profitably. A good GC will be knowledgeable in all of the trades, will be able to choreograph the project increasing efficiency and shortening project time, all of which should ultimately cover his cost. Think of running multiple small projects as running a big job with many work segments. You just can't do it effectively without a GC or at least a good Project Manager.
With a GC you loose a lot of the head ache but how much is that going to cost you?
You are going to have to find bigger profit margins to cover the gc.
@Aaron McGinnis I dont want to get into the business of construction management at all but with me not being a cash investor, I have to use hard money to even get into the deals so I have to find somewhere to save money.
@Wayne V. & Adam Bartomeo I totally agree with you both. I rather hire a skilled GC like Aaron to cut out the headache but it is not feasible 50% or more of the time to make the deals work, I cannot afford the overhead. Chip Chronister That is the problem. The only reason I am doing it because the deals are so tight in our market right now.
Cortney Newmans As you know, you should find deals that will satisfy profitability regardless of hiring a GC or not, if you couldn't afford to hire a GC then it is not really a good deal, if you GC it yourself you should be paid for it from the deal. But anyway, to answer your question, all people couldn't read your mind, and as to bring it to par, nobody can find that sweet spot you're looking for, it will take a few projects to convey what you expect and what they could do with it. Your best bet is, to improvise your system internally, like sign up for a pro account in home depot and enable text2confirm or open cash accounts with suppliers or small credit accounta in paint shop. The best way to get a good GC is to train one, working foreman will be your best bet.
@Cortney Newmans- You're hitting the same wall that I've seen Atlanta investors hit time and time again... I hit the same wall, and you can see where it led me.
In Atlanta, finding the deals that actually work while using a HML is very hard to do. Finding deals that work when using an HML AND a GC? Virtually impossible. HML is simply too expensive, and without running the construction yourself there's not much of a value-add to being the investor in the middle.
Put incentives in the GC contract to hit timeline goals. They can be slightly in the GC favor with a soft schedule but one that is acceptable for you. Budget like all goals will be met and you will be paying the incentives. If not at least you will be saving some on the budget. Although time is money and if the project carries on, you wish you were paying the incentive as opposed to being late.
I had a contractor tell me over and over in the bid process "I guarantee this will be done on schedule". I asked hime what exactly was he gaurante (ing). When asked for him to "put his money where his mouth is" so to speak things got different. He gave me his bid with schedule. I told him I would pay him that full amount within 3 days of getting his bill if he completed what he said he would do. If not I would mark off 5% discount per week. He made it in time but had to work OT the last week of construction. Not sure I would have had that sense of urgency if I hadn't done that.
Jeff Gebhart That makes plenty of sense. Do you write the incentives in your contractor agreement ?
With text2confirm what information would my contractor give the person at the register to authorize the purchase? Email? Phone number? Or would they need to carry the card?
@Jassem A. Just a pro account number, usually associated with your phone number.
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