At what point do you need a GC?

Question

I'm a little unsure about when you would use a GC vs. not.

As a hypothetical example, if the house needed painting, new carpet, cleanout, and had some holes punched in the walls that needed to be repaired, would it be better just to hire individual turnkeys for these jobs?

Is a GC just for when you have a group of major things that need to be done?

On my first property, I was planning to use a GC, but I don't know whether I'll just be needlessly overpaying if I use one for a bunch of non-major improvements.

Thanks.

Jon Holdman · Answer

I found this out the hard way when I tried to pull permits in Aurora CO for a property I own, but do not occupy.  I would have either had to claim I would occupy it, or have a GC license.  Subs can pull their own permits, but that was only for electrical and plumbing.  Since I had sheetrock and framing involved, I ended up having to get a GC involved.

Certainly this varies from place to place.  A quick phone call the the county or city building department is in order to see 1) what sorts of things require permits, and 2) who's allowed to get them.

Bill Bronchick's brother has recently gotten involved in CAREI and spoke at one of the meetings.  He had done some calling around about permits.  Those are mostly controlled by cities in the Denver area.  Apparently, this is not an unusual requirement.  Aurora was actually fine to work with once over the permitting issue. I've found that in general building departments are helpful as long as you're trying to follow the rules.

Will Barnard · Answer

Bienes, the short answer is you don't need a GC on that deal. As the homeowner of record, you act as the GC assuming you have the time and ability to hire and manage the subs.

Rarely should you ever need a GC while doing rehabs. YOu should be hiring the skilled workers and subs and increase your profit margins.

J Scott · Answer

Most of these things have already been touched on, but I'll add my $.02...

Here are the times when a GC is helpful, in my experience:

1. When I need to pull permits.  Here in Atlanta (as of last year), non-owner occupants are not allowed to pull permits, only licensed tradesmen and GCs.  So, if I need permits, I have a GC that will pull them for me and charge me for his time and effort (he needs to physically get the permits, call in the inspections, etc).

2. When you first started rehabbing and don't have a good grasp of how to schedule or budget, having a GC can make your rehab go much more smoothly.  I used a GC on my first two projects, and was able to watch how he did the scheduling, when he brought in which contractors, who did what, etc.  After my second rehab, I started bringing in the subs myself, and hired a full-time project manager.  This saves me about 15-20% on my labor costs.

3. I'll still use a GC on very large projects, but only for parts of the job.  For example, on my most recent project, the exterior needed a full rehab, including new siding, new soffit/fascia, new roof, landscaping, new back deck, renovated front deck, etc.  I had my GC handle the entire exterior, and was willing to pay a bit extra so that I didn't have to deal with the subs for the exterior work.  I still hired my own subs for the interior.

4. I'll still use a GC whenever I do an addition on a house, not only because of the permits, but because from a scheduling and oversight perspective, it's worth it to me to pay a little extra for that portion of the work.

Jon Holdman · Answer

In some localities you must have a GC license to pull permits on a non owner occupied property.  So, if your rehab needs permits, you may be stuck.

Will Barnard · Answer

J, good points, I agree with most.
I also would us e a GC if I was to do an additions, creating more square footgae or changing the bed/bath counts.
In my city, I pulled my own permits as the homeowner for things that needed them like electrical.

For other items, it is "required" by the city, but I don't always do it. Example, to re-stucco the house, and replace windows, it "requires" permits, but doing so without (so long as it is done right) would hardly put me at risk of liability in the future. Who is to say who and when was the stucco replaced.

Bienes Raices · Answer

Thanks everybody. I guess the next step is to find out what permits are required in my local area.

Shaun Steckler · Answer

Don't use a GC unless you absolutely have to on a project.  It's in their blood to try and extract as much money out of you as possible.

It sounds like you have some cleaning and painting to do on your project.  If you make the right agreement with the right worker, your project will go smoothly.  If you don't, you'll lose a lot of sleep.

Good luck.

Will Barnard · Answer

Thanks for the info Jon, I have not run into that problem as of yet, but have never invested in CO to date.

There are many things that "require" permits in most counties, but I have done many items without as the homeowner (not counting major stuff).

At what point do you need a GC?

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