I am in the process of finishing up my first two flips. I used a general contractor for each of them. Moving forward, I would like to connect with other contractors who can complete rehab projects for me.
Should I continue looking for GC referrals and use solo GC's? Or should I start looking into Construction companies?
In Facebook groups, I see people referring legit sounding companies to do the GC work. I'm talking about companies with real websites, what appears to be multiple employees, and facebook groups that look credible.
The bigger the company the more you'll pay. Bigger companies have more overhead to cover. That being said, with bigger companies you're projects should get done faster.
@Wesley Davis would they take on $30k-$60k rehab projects? I'm assuming there's at least one in my market that will.
IMO I'd rather pay more for guaranteed work, completion with few headaches, and very timely completion. My first two flips are taking significantly longer than they should and costing me a lot each month so I'm thinking that a more professional company finishing a rehab in half the time is worth every penny.
Don’t do any of that. Talk to others in your area and see who they use.
Or better yet when you see a rehab going on Roll up on them and ask them for their card and take their number and then let them bid on your project, I do both......Those are the two options are use because talking to people I know ,my competitors, people they use or the other way you actually see the work that the contractors are doing… The way you’re talking is like watching the news or seeing a commercial and believing everything that you hear and see… No good my friend
@Gary Barella that's a really good strategy however I'm exactly 2,000 miles away from my market. So I have to rely on referrals. This is partially why I'd like to lean more towards an official construction/rehab company with a legit place of business, website, social media page, etc.
Do people willingly give away their contractors? I can't imagine letting a good contractor try to work for a competitor (assuming I'm giving him enough work)
Damn bro I can’t imagine doing flips 2000 miles away… Why wouldn’t you just invest in Wall Street if that’s the case then you don’t have to do crap…I see many problems for you down the road with that strategy.
@Spencer Cornelia yeah they will. Bigger companies aren't always better. There's a lot of national home builders who are TERRIBLE. People use them though because they have an awesome sales staff and marketing techniques. Yes, i'm sure that companies that are listed on those sites will do the work. The thing I have noticed in my own dealings with flippers, is that flippers usually want GCs to sign a contract saying they will finish in a certain amount of time, and the flippers have their own terms with paying the GCs. A good GC will not continue working with you if you do this because there's so much work out there right now that they can get a job that will pay just as much as your job without the hassle/stress of extra contracts. The investor side of me gets why you want the extra contracts, the GC side of me hates them lol. A good GC knows that you wanted it done yesterday (everyone a GC works for wanted it done yesterday).
I'd also like to add, that the sooner the GC finishes, the ROI on their time and money is much higher. A 50,000.00 job finished in 2 months vs a 50,000.00 job finished in 3 months, the 2 month job made the GC a lot more money.
@Wesley Davis That's great to hear as a lot of the rehabs I want to take on will be in the $50k-$75k range. IMO this is perfect for a company that can move quickly. I'll overpay ESPECIALLY if they can finish a job like that in 2-3 months. As most of us probably know, the bigger the rehab, the more profit/spread available.
I use contracts just to save my own butt. But I also incentivize the contractors with a bonus if they finish in the time they tell me plus 30 days (10% of net profit). I feel like I'm fair with my contracts. And I definitely will be using them every time, even if GC's are tentative to sign. I need a way to make sure I'm not screwed over.
As a first time flipper, this is all still new to me. So the next phase will be about finding GC's I can grow with. I'm going to start researching companies to reach out to. Thank you for your help.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing