More value - contractor or architecture licensure?

Question

Hi folks, looking into either contractor license or architecture license to support further real estate development. Which one has more quantifiable value in general?

Thanks for sharing your knowledge!

Karen Margrave · Answer

Experience has more quantifiable value. Curious, why did you choose Architecture or General Contractor?

As a moderator on BP for years, though I've been away for awhile, I've answered this question many times in one form or another. Ask yourself, what are you good at? What are your strengths? What is your experience in anything related to real estate, construction, development, etc.?  Developers are the ones that pull all the pieces together on a project, but even that's not set in stone. A developer can work with an end user on a project they want done, find agents to locate the land with proper zoning, location, etc. to support the type of project. Find architects or designers, engineers of all types, general contractor, etc. to design the project, and know how to keep the design where it's functional, cost effective, but has appeal. There's so many pieces to the puzzle. Developers can also do their own projects, and sub out all the different trades, etc.

There are also a variety of skills that contribute to the development of a project. Sales, marketing, legal, etc. ALL of these things have value on a project.  Every state has different requirements, depending on the type of jobs. Some states you can do an open book test to be a contractor or a developer. Other states you have to be licensed for residential, but not commercial.

What are your goals? What type of project would you like to develop? It may be working for another developer would have the most value, or a GC, Project Manager, etc.

Jonathan Klemm · Answer

Hey @Hannah Joy - I'd echo @Bruce Woodruff those are both educational degrees that take thousands of hours to become a professional at.  I personally think it's easier to get a general contractor's license (especially here in Chicago - it's almost sad how easy it is), but that just means there are a lot of bad contractors.

Almost all states require architects to take a state licensing exam and need to have a bachelors degree in similar field to even take the test.

I found for me, if I can just find people who are really good at what they do (and enjoy it) I can let them do that and I can just focus on finding deals and building the team.

I would spend some time with some great general contractors and architects in your area to see if it's a profession you'd truly be passionate about...if not then don't waste your time!

Bruce Woodruff · Answer

Jonathan is right. I must add that out of all the Architects that I worked with over the years.....there were actually very few good ones. A lot of them are all about the big look and doing creative, artsy-fartsy things, but have very little clue as to how a building is actually built. You really don't have to know much about construction to be an Architect. The smart ones will defer to the builder when it comes to structural issues. The newer smart-ass ones will argue with experienced builders over stress and load points and stuff they have no clue about.

Bruce Woodruff · Answer

@Henry Clark is right - those are full time jobs. Speaking as someone who had multiple CA B level licenses, how are you going to qualify? You need verifiable 4 years at Journeyman level or higher. Signed for by someone with a GC license. You don't just go out and get a license....

And then there's the test. The last time I took it, it had a pass rate of only 12%, harder than the State Bar exam. You have to read a set pf plans to answer the questions, etc....

And if/when you pass, you'll have at least 5 years of paying dues and losing money before you're any good. So both the AE and B1 are basically 10 year investments

If you are just intending to do your own RE investing you don't need any license at all, you won't save any or much money.........an investor should really just find a good Architect and GC and then go back out and find more deals.

Alan F. · Answer

Between the 2 I'd pick contractor, because its running a business and there's a shortage in CA. The other comments are correct though, being completely devoted to your primary business is probably best.

Henry Clark · Answer

Depends on what Lane you want to be in..

Those two are jobs.  It takes 5 years to get good at any discipline.  If you pass the GC test then 5 years.  The AE 4 years of college then 5 years experience.

Depending on the degree you want to scale.  You can hire expertise out.  Training for those would possibly hold you back from your REI strategy. Unless you were planning to do them anyways.

Kristi Kandel · Answer

@Karen Margrave awesome summary! We actually just did a free webinar (local real estate developers) focused on the fact that developers don't need licenses or certifications BUT they do need strategic partners with those and their expertise to complete projects. A link to the webinar replay for "Accelerating Your Returns: The 5 Key Partnerships You Need in Real Estate" is right here: https://localdeveloper.kartra.com/videopage/w82BcHbARuZa

More value - contractor or architecture licensure?

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