How are people making money when using contractors?

[John Seitz]

Hello, I am a newbie and a fix and flip virgin. I'm spending a lot of time learning how to analyze properties and finding that the current market offers some pretty slim margins for profit. I'm a DIYer so most of the work and savings will come from NOT using GCs. I'm curious how people are making a profit when using the more costly option of using a GC. Are you accepting smaller profits? Do you just have great relationships with your GC where they're willing to give up their profit margins for volume work? Am I figuring something wrong? Thanks.

[Kyle Ebersole]

You have a great advantage that you can do the work yourself instead of paying a contractor to do the work. You won't be able to scale as quickly as you can only be in one place at once, but you will be able to make deals work that others can't because you are doing the work yourself. As for me, I normally GC and manage my own flips to keep costs down. If I know I have to use GC, I just run my rehab numbers a little higher. Best way to answer is I don't cut my margins, and they don't either, I just have to find the right deal that works for all parties. Hope this helps!