Investor · San Diego · Member since 2020 · 8 posts · 5 votes
Hello BP Community,
I've invested in multifam for a while and completed moderate renovations, but never under a time crunch that a traditional BRRRR strategy would call for. I'm curious to know at what stage do those with experience recommend locating the GC that will undertake the reno? I've seen conflicting information that it's wise to lock one on prior to having a deal (through general questions to find a good fit) and I've also seen it's fairly easy and efficient to vet them once a deal is found and they can actually submit bids. Is there a right answer here? Appreciate your feedback.
You want to interview ASAP. During inspections or walk through you can bring a GC in for scope of work. There are many bad GC's so interviewing and doing that early is best. They can make or break a deal
Sooner is better when working with a GC. Generally contractors seem to be the bad guys be they have to be the ones to give bad news about project scope or budget. In reality a lot of those bad news scenarios are avoidable if you have a good GC, a good relationship with them and bring them into the project as early as possible. They can save you lots of time and money with a small few steps.
You should ALWAYS have your team in place BEFORE the deal, that way you can get a realistic idea of construction cost and risk way before you expose yourself to the risk. You don't want to put a rush on your contractor to throw together a bid, especially if you are closing quickly on the deal.
Real estate is so much of a risk management business, purchasing a deal or getting it under contract and then looking for the expert to look at the problems/put together a scope of work will expose you to way too much risk, because you may not find the right person for the job or you may rush the contractor.
At the end of the day you're the leader of the deal, but it is imperative that you have consultants on your team to help guide you through the process. These "consultants" or team members would consist of: contractors, attorneys, accountants, specialty contractors, and material distributors. I also recommend learning from each and every one of these consultants, that way you have some type of proficiency and understanding of things. In my honest opinion this team should be in place before you find a deal, that way you are not left scrambling and settling for only the help you can find in the moment.
Thanks for the quality responses. The answer seems to be pretty definitive on this one…which brings me to my next question: for those with success in doing so, how are you finding a contractor who is able to give at least a fairly definitive answer that they’ll be available should you lock down a deal in the near future? Most are booked for months and I can’t say I blame them, but those that aren’t are hesitant to indicate if they’ll be available in the short term.
My only worry is that I’ll have the deal and get stuck with holding costs while I sort through contractors who appeared free a week or two prior.
I know completing deals remedies this situation, but for a first timer with no prior business with the GC, seems to be a crapshoot.