Hiring a GC Vs Subbing out work yourself?!

[Ben C.]

I’ve done new construction projects and multiple jobs down the studs with additions.

Now I’m getting towards my 6th project and wondering if it makes sense to be the GC. 

Im not looking to do any work but simply sub out the work myself to cut out the middle man and save 25-30%? 

I know the framers, electricians etc and thinking it might make sense. 

I’ve also got everything down by now (in terms of what order everything happens etc). 

Would also be nice to not be beholden to a GC in terms of when guys show up etc.

What do you all think?

[Joel Forsythe]

Quote from @Ben C.:

Quote from @Eliott Elias:

It is a full time job managing people, especially contractors. Expect to save 30% and take 50% more of your time. 

 @Eliott Elias you think on a 500k rehab budget you are saving 100-150k? Also, I have the experience as I said but I don’t have the knowledge where I can sit there and have a conversation about the intricacies of foundation/framing technicalities…

No friend, that’s a gross oversimplification. 20-25% isn’t being stuffed in the GC’s mattress.

If you are going Owner/Builder route, or getting a GC license if that’s what NJ mandates, of course you can try and save some money. The profit and salary an experienced contractor makes, evolves from an amalgam of foresight, efficiency, purchasing leverage, sub team trust, scope of work detailing, minimizing black outs, trouble shooting everything for every trade, phase, weather, material delays, cash flow. Then hope Murphy’s Law is busy with someone else’s project for never ending random things that pop up.

Oh, Liability. Yeah, you get to know what permanently recording yourself in the chain of construction liability means if you act as GC on a permitted project. Getting accurate insurance coverage then chain of accurate coverage of your subs.

Plenty of investors operate this way. I recommend tempering profit expectations down to 7-10% if you have some of the experience you stated above. It would also be very easy to erase that margin with a myriad of issues. If you treat it like a full time job, over time maybe you’ll get great at acing the profit percentage.