GC'ing your own project

[Akinyemi Bajulaiye]

I'm a new real estate investor. I purchased my first property last year, a duplex, with a traditional mortgage loan. Now that I have it rented out and access to a little bit of capital, i'd like to do a value add rehab. I've come across a few properties (SFH 3bed/1bath) in Philly under market value, however the quotes I get from GC's tend to put me above what i'd like to be all in for. I do know that GC's tend to mark up projects 10-30%. Now i'm deciding whether to GC my own project even though it'll be my first full rehab. I did my OSHA 30 a few months back and I took a construction mgmt course last year. Does anyone have experience GC'ing their own projects? And do you think this is doable even though it's my first one? Any and all thoughts would be helpful. Thanks

[Troy Sheets]

Originally posted by @Akinyemi Bajulaiye:

I'm a new real estate investor. I purchased my first property last year, a duplex, with a traditional mortgage loan. Now that I have it rented out and access to a little bit of capital, i'd like to do a value add rehab. I've come across a few properties (SFH 3bed/1bath) in Philly under market value, however the quotes I get from GC's tend to put me above what i'd like to be all in for. I do know that GC's tend to mark up projects 10-30%. Now i'm deciding whether to GC my own project even though it'll be my first full rehab. I did my OSHA 30 a few months back and I took a construction mgmt course last year. Does anyone have experience GC'ing their own projects? And do you think this is doable even though it's my first one? Any and all thoughts would be helpful. Thanks

I started GC'ing my own projects several years ago because all of the subs and GC's I was using were so disappointing (to put it mildly) that I thought I couldn't do any worse. Huge learning curve and lots of lumps taken. I had a background in the trades/construction but to be honest, my background wasn't a ton of help when it comes to Philly L&I and the subs you have to deal with. It took a good while to find decent subs but they all still have shelf lives or they can't grow with you or they just disappear. I'd say if you're just looking to do this to save 10%-20%, you're in it for the wrong reasons. You'll likely lose that much at least on your first couple projects. It will beat you down if you're not passionate or at least resolute about it. If you're just dabbling, you'll get crushed. If you're out to make a living out of this and have a burn the ships mentality, you'll make it through and can absolutely be successful. Good subs will carry you through, share knowledge and refer other good subs. 

Most successful larger investors I know in Philadelphia don't GC their own stuff, they just find better deals that support a GC expense. I GC myself for the extra income and to have more control over the timelines and quality of my projects, but I do envision a day where I simply hire out all my projects and focus on continually finding bigger and better deals instead of getting bogged down in the minutia of GC'ing.