First Flip. How important is a general contractor?

[Account Closed]

About close on my first house, was a hoarder house and going to need a lot of work. I want to hire a general contractor, I feel a good GC would help speed up the flip which would limit holding cost and help get a good estimate. My partner would like to self manage the flip and work directly with subcontractors thinking the GC takes too much money off the top. Is it worth it to save the headaches? Does anyone have experience in self managing a flip? Would love to hear your perspective.

[James Hamling]

@Account Closed I have not seen anyone mention the most important item here, that your doing your math backwards, and process. 

You should be asking yourself, how much will it cost you to NOT have a GC? Just any GC. Then, how much will any GC cost you vs a good one?     I am dead serious, because the answer to this will determine your budget, in $ and time, for looking for a GC, or a good one. I heard nothing about any set budget for this. 

And I need to touch on a VERY important item that in house-flipping, budgets are NOT just$, there is a time budget and a $ budget. ALWAYS! 

To preface, once upon a time I was coined the king-of-flips, because that's all I did, and I did it on massive scale before stepping away from that. So I speak from 1st hand personal experience. Now I had a massive advantage, I was a GC, and had spent near 20yrs in the trades before I started flipping as an investor, so I had things down to a science already. I can tell you, 90% of the profit I generated was directly a result from my renovation activities. If i went just 90 days over timeline, that could have been most of my net, gone, cost of $ burnt up. Or market shift. 

Look, a good GC does a hell of a lot more then just manage crews, that about 5% of being a good GC. No joke. 

First major item, I have vendor accounts and manufacturer direct accounts which gives me pricing and time of delivery that nobody in general public will ever get, period. Pricing alone, most of my prices were volume based, so I can make 20K more on a flip just because of how I buy things. Delivery time, that's a huge one, as a GC (ok, just assume GC = GOOD GC) I get expedited service over many others and in flipping time = money. 

Then there is dealing with inspectors and local government. Often I walked in to get a permit approved, I know everyone in that office by first name, we have seen each other a hundred times before. I know what quarks they have, what aspects they press on, and they know me, my work, and i get an easier time because they have that assurance, not to mention getting any kind of variance passed. I also know from the get-go what will need to be done and how it will need to be done, I know if the electrical inspector in that area is all about his GFCI's, or if the HVAC inspector get's all giggly when he sees tapped seams on trunk lines and then just automatically passes and walks out. Heck, one time sitting waiting for the framing inspector, who was famously known as the toughest inspector, in the toughest jurisdiction, she pulls up, walks 10' from her car when looks up at me waiting at front door and says "Oh hell, this is one of your places James, why didn't you tell me, I'd have saved the trip" and signed off on the inspection before she even got onto the yard. That's a result of having done dozens upon dozens of passing inspections without a single item missed, reputation built, only a GC can bring that. 

So yeah, not having a GC, seems insane, like a perfect receipt to answer how can someone flip in the longest time for the most expensive way with the most headaches possible. 

We havn't even gotten into the fact of sub-relations and having loyal subs with secured pricing, the ability to run a gantt schedule, or adjust one, to get maximum efficiency and minimal time of reno, knowing what's the most current hottest trend buyers are looking for (yeah, a GC knows because a GC is who all the people are having do and design it). 

A GC is ROI, every time. If you want to be an investor, BE AN INVESTOR. Does WB go out and bottle coca-cola at the plant? Do you see Elon fueling up rockets? No, of course not, because there too busy being the investor and empowering the functionaries to do there functions.