General Contractor or Other Rehab Options?

[James Carollo]

As a general contractor that has mainly worked with real estate investors and an entrepreneur that has focused on solving problems in the industry, I am doing a study with the goal of overwhelmingly proving that many investors in real estate have thought wisely in terms of time/money in many areas but less so when thinking of rehab/repair costs. My motives for doing so are clear and have been driven by years of observation and a multitude of investor/contractor relationships. However, I want some input from investors, realtors with the task of serving investors, lenders, and any others in the business.

PRELIMINARY FINDINGS:

 Investors often fail to accurately monetize their time when deciding how to spend rehab dollars.  

 Investors see big picture better in areas other than rehab spending.  

Providing materials and hiring labor buys more materials and turns possible fixed rate spending into variable.   

Hold time and trouble renting subpar product alone makes up difference between general contractor and other option.

  Other options reduce accountability, add stress, distract from more investing, decrease cash flow, but add perceptual gain and the perception of control.  

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CONCLUSIONS:

Affordable contractors specializing in the efficiency and organizational genius to serve the real estate investment community are in short supply because investors need to see this data quantified like they see the deals and strategies they spend their time on.  

General contractors do not just provide peace of mind but actual quantifiable return on investment in both the short term and the long term.

  Investors can help create their own solutions in this area as the aging skilled tradesmen and construction labor pool contraction continued to be revealed as a much bigger problem than first realized.

As investors become more educated on the effects of how rehab costs and their time can work together-a new class of low cost high quality general contractors serving investors and property managers can develop. Like when Chipotle and Panera stormed out of the gates and took on fast food. A whole new class of construction/maintenance contractors who solve the labor shortage, who remove burdens, and train up more leaders to assist the investment community.

All comments welcome. Thank you