Should I get a Contractors License?

Question

I am a real estate broker in California and always thought about getting my contractors license so could learn more about doing flip and knowing the costs. Besides that, what other benefits would I have being licensed? I also notice that a lot of contractors are currently busy and don’t have time for new projects. Could this be a benefit as well, being in the real estate industry and also being a contractor? I could create a team and sub out all the work too. Any others have a real estate license and have a contractors license? Do you feel it’s a plus?

Jay Hinrichs · Answer

Great point right now in the market place quality subs are making bank.. along with GC.. there is a problem in the US with the lack of young people coming into the trades and want to just be investors and live the life they deserve by collecting rents :) BP is a prime example of that.Top Subs in our markets make BIG dough.. my dry wall contractor has 600 employees and a Jet.. so on and so forth..

Noah Barba · Answer

I work for a renovations company here in Michigan. I'm most likely going to be getting my builders license in the next year, but I'm doing it so that I can actively work on my own rehabs (with help from some subcontractors). The benefit I seem to have learned by talking to various contractors including my boss, is that with the license, you can have less difficulty pulling permits, potential lenders could feel safer lending to a licensed contractor, and you can have less liability if someone were to get hurt due to what you've renovated. If you aren't touching any of your rehabs directly, I would say to not get hung up on the license. It will only teach you code and business law from a contractors position. Instead, I would purchase a shortened, more user-friendly book about builders code and learn how to look for certain things that could eat at profit (Also eat up everything you can from youtube when it comes to remodeling).

Jay Hinrichs · Answer

In Oregon were I am active.. to buy and renovate even one home.. the company or person in title to that home has to have a developers license.. no test but bond and insurance.. this limits some folks who have crappy credit and cant get those things.. the state drives around looking at jobs and will fine you 5k if caught.. ask me how I know LOL.. its not enough that I have a developers license for my personal LLC each of my entities if they are doing business have to have their own developers license.. this does get us contractor rates at supply houses. WE do stuff in CA as well.. there we hire GC.

Matthew Paul · Answer

Becoming a legal licensed contractor that does quality work at quality prices can provide you a very comfortable lifestyle . Why bother with flipping a house when you can make great money doing the construction without risking any of your funds .

Greg Dickerson · Answer

@Charles Cooper this is how I started in the business and I am still a licensed Broker and GC in my two main states where I do the majority of deals. There are many advantages to being licensed and lots of ways to leverage the equity created by being a GC especially in new construction and commercial development.There is also a lot of risk and a big learning curve depending on the type of projects you want to take on.Doing your own deals and doing work for others are two very different things. You should do a number of your own project and get a full grasp of every aspect of the business and a full understanding of costs before you take on work for someone else.

Javier D. · Answer

@Charles CooperGC is pretty broad and the learning curve/liability might not be worth the hassle. If you’re planning on doing new construction then I’d say go for it. For remodel work...not so much.A specialty license like drywall/glazing etc is nice and nitchy where you can market and have a couple of crews running. Stay away from paint.Shell is very profitable in my area and get paid fast before the builders f up and go after bonds. Good luck!

Anthony Dooley · Answer

I will answer your question with another question. Are you planning to hire yourself out for construction and home improvement jobs? Are you going to manage a crew of workers at different job sites? If your plan is to make improvements to your own property, a license should not be required. Unless you plan to switch careers, I would focus on being a broker.

Bryan Devitt · Answer

@Charles Cooper have you looked into what it takes to get a license in CA? It isn't a state you must send money into. I believe you need to show proof of an apprenticeship and take a detailed test to say the least. If you do that and get a license that does zero for you. You can hire the same subcontractors right now and they can pull their own permits. Your only benefit is being able to pull permits so you could hire illegals and that will get you hated among the good contractors in the area, they'll consider you a hack and they'll tell everyone around that you're a hack. Contractors cost money for a reason and if you think because they're busy and you have some free time that you can magically become a contractor and do as good of a job or better, get ready for posting sob stories on here about jobs going many months over, being taken advantage of, out of money, underwater on properties and not having a clue how to get out of it. It's been tried many times and there have been many many threads on here about it

George W. · Answer

I'm not sure what it's like in California, but here general contractors basically just register with the state. You do have to get the proper insurance and bonding. So you'd probably want to start a company just for your contractor business. Just having a contractors license probably isn't going to teach you costs and how to acutally do the work. Just like having a real estate license may not teach you how to be a real estate investor. That being said you could get it most likely fairly easily. You can definitely sub out all the work but both you and your subs would need the proper insurance.