Should you get a contractors license?

Question

Just wanted to throw a question out there to house flippers and investors. Do any of you ever go out and get your general contractor's license? Even if you don't do GC work for others and do strictly owner-builder projects, is it worth it to get the license to add to your credibility and for educational purposes?

Just curious

Steven Del Prete · Answer

I see no reason why you shouldn't. It's great to know how things get done, the Order In which to do them and so on. It puts you more in control of your projects which could help keep cost down plus not paying the fee for having a GC around the whole time. It will eat up more of your time instead of writing up a scope of work and having someone else handle it. Especially when you do more then one project at a time but the savings should be work it to you. I guess it's ultimately up to you no matter what any of us say. As far as liability I believe even if you aren't the GC but because you own the property your selling any structure problems are your problem regardless. Also I don't thing you would miss that and even if you did when the buyer sent a home inspector to your home they should find the problem anyway and then you can fix it.

J Scott · Answer

I'm a big fan of having complete control over your business (don't confuse that with doing everything yourself). If having your contractor's license will help you to better control and manage your business, go for it. When I was in Atlanta, I didn't find it necessary, as the counties where I was rehabbing were pretty lenient on what required a permit and what didn't -- so unless I was doing structural work or an addition, I didn't require a building permit. Therefore, having a GC license wasn't much benefit. In Maryland (where I recently moved), most things require permits, even basic "paint and carpet" rehabs. For that reason, I'm in the process of getting my contractor's license. I don't want to be a GC, but the flexibility to pull my own permits gives me much more control of my business. Just some things to think about...

Account Closed · Answer

Jason, in most jurisdictions the need to have a contractors license is if you are performing construction services to other parties. If you are performing those services as an owner of your own properties the license would be unnecessary. This is true in MD, DC and VA. The need for permits is something you may need and this varies, once again, by jurisdiction. My advice, call your local building department.

Sebastian Gruner · Answer

i'm a big fan of getting a GC license, i really wanted to get one, the problem is/was to get the license you need to show years of experience in different field of construction signed of by someone with some sort of superintendent license. So i am not sure how you guys can just go and apply for one. Maybe its because of the state and county i am in. Let me know how things are in county

Justin Silverio · Answer

I've been having a lot of difficulty finding good GC's in my area and am seriously considering getting my contractors license. Other investors in my area are experiencing the same with GCs. My thought is to hire a 3 man crew including a project manager. The crew will be paid hourly and the PM will be paid salary plus have get a piece of the profits to keep his interest in line with mine. If there are times when I don't have work for them, I know other investors that would keep them busy. However feasible this seems, though, there is a lot to consider. I still need to work through the numbers and see if I can even find good workers. In any event, contractors have been the most difficult aspect of my business.

J Scott · Answer

At least in Howard County (where I live), this is only true if it's your primary residence. If it's an investment property and permits need to be pulled, the owner of the property cannot pull permits if they aren't licensed. It may be different in other counties, but this is also consistent with several other major cities/counties I've worked in other states.

Brian Mathews · Answer

I think it's a good idea personally. But you need to check your state laws regarding liability. Because what if something is the matter with the house structurally that you miss and you sell it? Will you as the builder/GC be held responsible for that whereas you as an investor wouldn't. If you go out and do work for others and something similar happens for whatever reason or somebody gets hurt or major damage occurs It's going to be on you. But as I said, I'm all for licensing for this sort of thing. I think it lends more credibility to you and it does give you the opportunity to pick up work when times get slow. My 2 cents.

Dusty Bowling · Answer

Hi, Jason. I am a flipper in Indiana and was wondering the same thing. I do 3 or 4 complete gut job flips a year in a small town and was thinking about starting up my own company and getting a license. I've had 4 or 5 guys do consistant work for me over the past 7 years or so and am trying to raise capital to go to the next level and do multiple flips at once. I have a complete crew of handymen that I have found over the years that can complete a rehab from scratch. My reputation has also grown and I keep getting calls from individuals wanting me to do work on their houses. I feel getting a license would not only help with your flipping reputation, but would also aid the begining investor in the slow times and allow you to sub out your workers, make some money, and keep busy year around. Granted the long term goal is to flip more homes and I wouldn't have the time to sub out my workers as I would make more money on flips than contracting out. I think getting your license would give credability and allow you to get your company name out in 2 avenues and completely promote your flips and your quality of work as one.