GC costs

[Jesse O.]

Hello everyone!

Thanks in advance for your input. I'm search very hard to find my first property to rehab and sell. I have a couple rental properties and consider myself pretty handy in terms of installing flooring, minor electrical, painting, etc and I enjoy coordinating repairs and getting out there and meeting people that do this type of work. That being said I have a full time job and have a wife that is looking forward to painting and picking out fixtures and such when the kids go back to school in the next couple weeks.

I had a GC give me an estimate on a potential property and the price came out to around $30k that includes roof, entire HVAC, bathroom, kitchen, flooring, drywall and paint. I did not get a breakdown of expenses and looking to see if he will do that for me. I don't want to waste any more of his time and I'm not going to move forward with him.

My questions are:

What is the typical GC profit margin?

What would be the typical savings on this type of work be if we managed getting the right people in to do the big work and us painting and doing the small stuff (fixtures, new outlets and switchplates, door handles, etc) ourselves.

I know time is of the essence and we would be hiring out the big stuff anyway. Would the savings of managing the rehab ourselves (especially when my wife is available and experienced working with some people vice hiring a GC to do it be worth it? What about when using a HML and you're right about at the 65-70% ARV - rehab. Toying with the idea of covering the rehab with my cash and using hard money for the purchase.

Thoughts? Thanks again.
Jesse

[Mohammed W.]

I've always used the same handyman with a 2 man crew. He pretty much took care of everything minus major electrical or major plumbing. I wouldn't use him for HVAC or the roof either, unless it's just a leak. I've always found a licensed contractor for those major jobs myself, but had the handyman coordinate the work and instructions as a GC would. If you feel comfortable with a handyman with enough experience, you may be able to get away by going that route and have him act as the GC in the process. I've found this to be a huge cost savings.