Should You Use A Contractor To Rehab a Flip?

Question

Using a contractor to rehab a flip can be a good idea for several reasons:

• Experience and expertise: Contractors have experience and expertise in construction and renovation, and they know how to get the work done quickly and efficiently. They can help you avoid mistakes and ensure that the work is done to code.
• 
• Timesaving: Hiring a contractor can save you time, as they will be able to handle all aspects of the renovation, from obtaining permits to coordinating with subcontractors.
• 
• Cost-effective: A good contractor can help you stay within your budget by providing accurate cost estimates, identifying cost-saving opportunities, and helping you make informed decisions about materials and finishes.
• 
• Legal compliance: Contractors are familiar with local and state building codes, and they can help ensure that the work is done in compliance with all laws and regulations.
• 
• Access to resources: Contractors have access to resources that you may not have, such as specialized equipment, skilled labor, and materials at wholesale prices.

However, it’s important to note that hiring a contractor also comes with some downsides, such as added expenses, potential delays, and the need for proper communication and coordination.

It’s essential to do your research and find a reputable contractor with a good track record of completing similar projects on time.

Sivakumar Ganapathy · Answer

I'm looking to do this in Texas. Is there some place where I can see how profit sharing and partnerships are done in general for these types of contracts?

William Graham · Answer

This will be a challenge for you. I lived in California 26 years where my wife was a K&B CAD designer working with GCs and remodeling companies and now does that remotely. If your looking for any of these positions to be remote work you will run into California’s AB5 for 1099 independent contractors. It will not work in California so each of these positions will have to be employees.  You will probably have to speak with a lawyer pertaining to any contracts in California.  Sorry it isn't better news.

Sivakumar Ganapathy · Answer

I'm trying to be an investor in flips and trying to form a team of agent, designer, contractor etc. Is there a place to look for establishing a legal contract, getting advice on a good profit-sharing model etc? Appreciate your help!

William Graham · Answer

I agree with this.  Hiring a contractor is essential for a significant rehab, especially in a litigious state. If just paint, maybe, maybe not. In the end, experience costs money, but doing it cheap and redoing it or going through litigation after selling the property will cost more. Worse yet, if something was done wrong, short cuts taken, and the new property owner (or renter) got hurt. It isn't worth that.