House Flipping Without a Contractor

[Andrew Tinnon]

Hello,

I am currently located in the Denver, Colorado area, looking to start doing some fix and flips to generate some extra income and eventually transition to a full time real estate investor. 

One of the biggest limitations I am seeing in the fix and flip market, at least in Colorado, is the requirement of a registered contractor to be on the permit for a rehab project. I have experience in construction and rehab projects so would plan on doing a lot of my own work and subcontracting out the rest to save money vs the alternative of hiring a contractor to do the whole project. 

I'm seeing that a lot of the municipalities will allow homeowners to submit building permits, but will place limitations on residency requirements and property types (i.e., not allowed on townhomes or condos, must be primary residence for 1 year). I am weighing the benefits of trying to get my contractors license as I am experienced in construction, but don't think this would be an easy process and it would be ideally avoided. 

Does anyone have any suggestions for how to get around these restrictions, or know which if any municipalities don't have these kind of restrictions?

Thanks for your help, always looking to make connections, so feel free to reach out to me directly. 

[Alan F.]

Quote from @Andrew Tinnon:

Hello,

I am currently located in the Denver, Colorado area, looking to start doing some fix and flips to generate some extra income and eventually transition to a full time real estate investor. 

One of the biggest limitations I am seeing in the fix and flip market, at least in Colorado, is the requirement of a registered contractor to be on the permit for a rehab project. I have experience in construction and rehab projects so would plan on doing a lot of my own work and subcontracting out the rest to save money vs the alternative of hiring a contractor to do the whole project. 

I'm seeing that a lot of the municipalities will allow homeowners to submit building permits, but will place limitations on residency requirements and property types (i.e., not allowed on townhomes or condos, must be primary residence for 1 year). I am weighing the benefits of trying to get my contractors license as I am experienced in construction, but don't think this would be an easy process and it would be ideally avoided. 

Does anyone have any suggestions for how to get around these restrictions, or know which if any municipalities don't have these kind of restrictions?

Thanks for your help, always looking to make connections, so feel free to reach out to me directly. 

 These laws are becoming more prevalent because unlicensed hacks are doing construction and remodeling.

[Evan Polaski]

@Alan F., I believe I only ever needed a work around on one property.  In this case, I paid a contractor that we were only going to use for a small portion of job to allow us to submit permits with his name.  Granted, this was a contractor we have worked with many times, so he knew us and trusted the work. 

If you are going to sub out some of the work to someone with a license, you may ask them what it would cost for the work and how much they would charge to be a "consultant" to let you do the same.

[Alan F.]

Quote from @Evan Polaski:

@Alan F., I believe I only ever needed a work around on one property.  In this case, I paid a contractor that we were only going to use for a small portion of job to allow us to submit permits with his name.  Granted, this was a contractor we have worked with many times, so he knew us and trusted the work. 

If you are going to sub out some of the work to someone with a license, you may ask them what it would cost for the work and how much they would charge to be a "consultant" to let you do the same.

 I've been a contractor for 33 yrs, what you described isnt legal according to the Contractors license board. Not throwing shade. I've learned alot from your posts, thx

[Terri-Leigh H.]

How extensive are your flips? Could you hire out the scope as legally required? I am in the process of getting my GC license for Jeffco and while not a cake walk, it's not horrible. Might be the commitment you need to make. Let us know if you want to chat further, we do a LOT of work with investors in Denver and the foothills.

[Evan Polaski]

@Alan F., I cannot say if it is or isn't legal in Ohio.  But as noted, this GC was on site doing work on the house.  All inspections were passed first time.  

Again, can't speak to legality of this.  I understand the arrangement is certainly different, but from a practical standpoint it isn't much different than a licensed GC staffing a team of laborers, who are actually doing all the work, and the GC checking in on quality of work.  

But in Cincinnati, I can pull my own permits if I am working on my own house. The issue I had was I bought house in name of LLC, so needed a licensed GC on permit. Additionally, to be licensed GC for residential work in Cincinnati, you simply complete a form and pay the fee. That's it. No test, no experience, nothing else needed (beyond an insurance policy number to complete application).

Again, not clear on legality, just stating that from a practical matter, it would really make almost no difference.