Any advice on dealing with GC's for rehabs?

Question

I have realized I cannot keep up with the workload doing the work myself. I will be hiring GC's from now on. I was hesitant because I know they could charge an arm and a leg for something that's not even difficult. I have some questions:

1. How much down payment is the standard %?

2. How do I know they will work at a quick pace once hired? I would hate for a project to be put on hold because of a lazy contractor.

Any other tips you could give me would be appreciated. Thanks.

Doug W. · Answer

ROFL! I can't imagine any good or great GC wanting to work for you if that is the attitude you have about their services.

Tips:

1) Don't nickel and dime them. This is their job and they need to put meals on their table, too.

2) Be fair with them. If you are an a**hole then expect the same treatment in return

3) have a VERY detailed and clear Scope of Work written up front BEFORE you ask them to bid on the work

Christopher B. · Answer

Unless you are only doing dinky rehabs just become a GC and build your own team. 4yrs ago my mentor told me I would do just this. I stated I didn't want the employees, wanted to stay flexible, etc. Well, I'm going to be doing just that this year. After 4yrs I have learned that managing my own employees is easier than dealing with the shenangigans of contractors. Contractors are the very worst part of this business but obviously very important.

By becoming your own GC you take control of your projects by pulling your own permits picking subs, etc. Not being dependant on them for this is big and trust me, they know when they got you in a vice and will take advantage of it almost everytime.

By building your own team you again are taking control of your projects. This will increase reliability, shorten your project timelines (= more $$), and reduce your daily involvement in the projects, etc. If you don't want to manage a team yourself go hire a project manager/lead carpenter to manage the day to day.

Christopher B. · Answer

I had a plumber quote me $700 to change a toilet in a rental a couple months ago HAHA. He was surprised when I said no too! Now this did include the toilet so even if you take $200 for the toilet it's still $500. Insanity. I don't believe in nickel and diming contractors but in markets like this they get dang greedy.

Nicholas Scatton · Answer

All GC and contracting work is going to be expensive if your comparing what it would cost you to do it.

This is why its important to know rehab costs and what the going rates are. Better to use subs than GC's tho.

If you dont want to pay for small jobs, do them your self or dont complain because time is money, and everyone has a minimum.

Doug W. · Answer

How many quotes did you get for the work?

Plumbers here routinely make $150/hour. Add in the cost of a toilet (Kohler toilets start out at around $120 plus tax) and the time to drive to/from the store and to/from your house.

Just because you are an "investor" doesn't mean any GC has to give you rock bottom prices. Especially if he/she has enough other work to keep them happy.

Ritch Bonisa · Answer

@Christopher B. that's awesome!  Congratulations!

Steven J. · Answer

Some hard truths in the thread here but I have to agree. If you're going to assume that the work they are doing isn't difficult then you might as well assume using them only once because you'll never appreciate their work at any level because you believe you can always get it done for a better price or something. You're likely right that you can get it done for a better price by yourself but that means you can't spend that time doing other work and finding the next deal.

As for actually dealing with contractors I go over my scope of work courtesy of J. Scotts forms in his books for the most part. This shows them that i'm serious, i've thought it over and I know what I'm expecting. Secondly, I have them pick the finish by date with the clear understanding delays will cost them x amount over time. This puts their own ego on the line because they are picking the price (that's normal), they are picking the finish by date (their ego), and they are agreeing to the penalty for delays (their pride and wallet).

Manolo D. · Answer

Well that's a bummer isn't it, just sleep 3 hours a day and do more work. It's that easy, either you pay for someone's time or do it yourself. Plain and simple.

Any advice on dealing with GC's for rehabs?

Most Popular Reply