Should I create my own contract company or hire other contractors for my flips

[Dan K.]

Hi BP Community:

I debating on whether to start my own contracting company for my flipping business.  I currently pay a seasoned contractor to be my project manager for my flips.  He has a regular job but works for me part time.  We currently do about 1-2 flips per month.  My contractor and I are discussing whether to start our own contracting company.

Pros:  We can control the timeline of our flips better and hold down costs by keeping the work in house.   Often we are at the mercy of my contractors if they pull their subs for other projects.

Cons:  I'm not sure what the cons are. I guess there is increased liability and some minor overhead costs.  I'm not a contractor so I'm relying on my potential partner to give me the risks/benefits. So far I don't see much downside, however, I wanted to check with the BP community, especially those who are contractors doing flips.

thanks a bunch,

Dan

[Steven J.]

I'm sure that starting your own business will be beneficial down the road as you continue to grow. If you feel you're not at that point yet I would try to rework your contracts with the subs. When I hire work out I give the subs the detailed contract of what is to be done and a penalty if the work is done past a given date. I give them the date to get it done because then they are in control of that. Obviously, they are going to give them selves buffer time but I like knowing the work will be done by that given date.