I’m a new investor to Nashville, TN.
I have wholesaled one deal ($20k profit), and just bought my first multi-family (3 apartments in East Nashville).
I am partnering up with my realtor on future endeavors (BRRRR, flipping, more and wholesale deals) and am wondering whether it’s worthwhile getting my own GC license.
I enjoy designing and creating, and while have no construction experience... am a little control freak, and haven’t had many good experiences with GC reliability / professionalism to date.
I know there are liability risks, etc. but I’d love to hear from other investors who have either got, or considered getting, their GC license as part of their overall investor strategy.
What were the factors you weighed up, and why did you choose the path you chose?
Ok get your GC license , work on your own flips and then make some real good money by doing projects for others .
You can make as much or more being the contractor on a job without risking any of your money , than buying and flipping . A good GC is simply someone who has a lot of great subs , and excellent scheduling skills
@Matt Hoiles , Getting a G.C license to do your own flips seems like a great ideal..., at first. You said that you are a "control freak" this and flipping is a not a good combo. The money made in flipping is the turn around time. If your stuck in the trenches hanging sheet rock, painting or some other type of trade then your not out finding the deals to keep your business moving forward. If you want to get a C.G license so you can manage the job site then you may be wasting your time. You don't need to be G.C to manage, most city's allow Owner/Builder to pull permits and hire subs. Having no construction back ground will make passing the test difficult. Of course there are classes you can take to pass but your time will be best spent studying the R.E investing strategies. I think I am qualified to give you this advise because I am a G.C and have been in construction for 30 yrs and I also own a R.E Investing Company. I've done both, I use other G.C's and I have also used my own crews to do work on my flips, it take to much of energy and time to manage my crews while buying/selling properties at the same time and I have been in the game for 30 years.
@Matt Hoiles I think you have to weigh your costs and the benefit to you. If you are not going to monetize the asset of a GC license (e.g. becoming a contractor for investors, build the company up to free time to not have to oversee every project, etc.) then you are better off not wasting the time and money getting one. I hear the same thing from people who talk about saving themselves some money by getting their Realtors license. The truth is, the time and money you spend on such endeavors is often better spent towards analyzing deals and building your investment buisness.
The more individual tasks you take on the fewer projects you are allowing yourself to do. The people how are truly successful in this, indeed in any business, are the people who automate and pull back from the systems they build to see if they really work without them.
As a final point I would say that a creative eye is a useful tool but it isn't something you should hang a hat on. You would be better served trading it for the math. Build as close to cookie cutter as you can so that you minimize your expenses and maximize the appeal to the broadest base of potential buyers/renters. You're not aiming to be an interior designer you are aiming at being an investor. Decorate in your life automate in your business.
GCing for other people will be frustrating at best and unprofitable. Unless you're willing to invest in the equipment, constantly look for even somewhat skillfull people and hire an experienced manager (since you have none), I would focus on your own projects. And keeping crews together in-between jobs is a job in itself. You don't need a license to GC (manage) your own work. I manage all my own projects ( keeping the crews moving, picking up materials, clean outs, clean-ups, doing all the little things contractors ALWAYS leave undone, authorizing changes along the way that reduce costs and increase value, etc). I've saved 10,000's with this strategy over the years. I know that your thinking sounds good on paper but decide to either be in real estate or in contracting.
My thoughts was not necessarily to be in the trenches hanging sheet rock, but rather overseeing the projects and building deal flow to keep a reliable and high quality crew busy, and at my disposal for my investment opportunities as they arise. This would mean acting as GC for other investors early on, but aiming to keep them full utilized on my own deals down the track.
My partner who's a realtor is spending her time going out and finding deals, given my finance-background, I'll be focused on assessing each deal from a financial standpoint, but also found the construction-side attractive.
My thoughts are for the next couple of rehabs we do, I'll use outside contractors, but look to learn from them, and re-assess whether the GC decision makes sense at a later point.
Thanks again for your input!
@Matt Hoiles getting your GC license in TN requires quite a few hoops - 3 years of experience, passing an annoyingly hard test, and carrying things like worker's comp insurance. I am getting mine right now. Upfront costs are high and they actually expect you to report that experience.
@Ryan Stahr which level of GC license are you going for? BC, BC-A or BC-A/R?
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