General Contractors

[George Foster]

As a general contractor here in the Chicago area. I want my fellow investors to remember when hiring a general contractor, included in the costs of completing your project he/she will charge overhead and profit. So for example, if as one of the line items on your project is the installation of a furnace and a/c and the cost is $5,000 from the subcontractor. If a general contractor is used that cost will now be $6,250. If you are completing a project and you are managing the construction of your project, you will not have to give this $1,250 to the GC.

If you are reviewing potential projects and want the assistance of a General Contractor, remember that this contractor has a very low chance of a job because the investor does not have equitable interest.  If you already own the property and you want a cost estimate, now this is business as usual for the GC because competing for business is what normal businesses do.

This is a snippet from an estimate that I provide on a project. If someone wants general information to help them make a bid, I typically give a ranges to help them assess if a deal is worth pursuing. I only need to see pictures to determine a possible range for the project's completion. When completing a more detailed estimate, a contractor can spend upwards of 8 hours to do this. 

I will admit, I tend to be a bit detailed when completing estimates and some investors don't care for this. I do this because I have to protect my margins and I need to have accurate information to keep my bids relevant and accurate. I am always open to helping anyone but as long as it does not take away from my ability to make money for my company.

[Eduardo Cedeno]

I am a GC and Investor, PPL  you need to understand that GC as well as an  Investors we need to make money, we dont work for free, so you can make money.  GC's we buy thousands of dollars in material and not just for flipping homes, I do new construction, remodeling, additions etc  so my discount on cabinets wood electric material has been gain with hard work. We pay L&I for our employees. and Medicare,  social security, unemployment etc.

When I Invest in some house for flip. I use one of my companies to buy the property and I contract my construction business to do the job, and I pay the construction company the same as I were a different person.  I do have a better rate for investors I have some investors that had been using my company for years. Always on time on budget and with quality.  The advantage to deal with a trustee GC is that you will deal just with one person instead of 5.