Benefits of Getting General Contractors License

[Kyler J Sloan]

Everyone is always talking about the pros and cons your realtor's license, but what about those of getting your General Contractor License (GC)? 

Especially those who make a living off of flipping and / or building houses, I would think this would give you great insight and control over rehabs & build expenses; whereas, when you outsource everything out to a GC, you have not access to the relevant details -- the budget, upcharges, permitting process, coding restrictions, etc. It is important to know your limitations and expenses so that you can identify opportunities for savings on furfure projects, but it is in the best interest of the GC to conceal these things, so that the savings are added to his margin instead of yours. 

I would love to hear from other investors who are also GC's as to the pros and cons of getting their license. 

[Nate Herndon]

Quote from @Kyler J Sloan:

Everyone is always talking about the pros and cons your realtor's license, but what about those of getting your General Contractor License (GC)? 

Especially those who make a living off of flipping and / or building houses, I would think this would give you great insight and control over rehabs & build expenses; whereas, when you outsource everything out to a GC, you have not access to the relevant details -- the budget, upcharges, permitting process, coding restrictions, etc. It is important to know your limitations and expenses so that you can identify opportunities for savings on furfure projects, but it is in the best interest of the GC to conceal these things, so that the savings are added to his margin instead of yours. 

I would love to hear from other investors who are also GC's as to the pros and cons of getting their license. 

From the lending side, having a GC license typically qualifies you for 2 "experience points". Experience points qualify you for better terms like lower rates and higher LTV, and each loan program has its own unique experience requirements. In general, 4-5 "experience points" will qualify you for nearly the best terms available. Sometimes as low as 2 points is all that is required to access the best terms.

Here is a list of things that, depending on the program, qualify as experience:

o  General contractor license - 1 to 2 exp.
o  Real estate agent - 1 to 2 exp.
o  Rental property currently owned - 1 exp. per property
o  Fix & flip in past 24-36 months - 1 exp. per property