Bringing construction in house

[Brandon Purdeu]

I am considering trying to bring some of my construction in house. Looking for advice for anyone who has done that in the past and to learn from some of their mistakes... 

Presently my company consists of three people. Myself where I act 80% of the time as a full time residential broker and 20% on my flips. I have a full time project manager, who schedules sub contractors, general contractors and handles the materials ordering for job sites. Lastly I have a part time admin who runs may back office and marketing. 

My model all along has been to hire contractors to do the construction from start to finish to which I've always been very slow in the remodel process due to their timelines and poor contractors in the past. I have found a general contractor that I like his quality of work and his pricing is competitive or below market rate on most items. He has a crew of about 6 and great connections into the building world as he's been in business for 30 years... 

However I get frustrated in the delays I suffer from him running too many projects. I have considered bringing some of my construction in house perhaps 2-3 person crew that can handle my tile, painting, trim, cabinets, flooring etc... With the project manager they would have adult supervision most of the time but I worry about the real costs of Workmans comp, liability insurance increases etc... 

We currently do between 2-4 projects at any given time. As a realtor if they were slow I could turn them onto due diligence repair requests to keep them busy when they may be out of projects... 

Thank you for any advice you can share... 

[Greg Dickerson]

Brandon,

I would not advise you to bring any trades or labor in house. It will bog you down tremendously. You are doing it absolutely the right way and the only way if you really want to scale. You could easy double or triple what you're doing now, you just need to find a couple more contractors or one larger outfit. 

The other thing is to make sure all of your subs supply everything turn key, light fixtures, plumbing fixtures, tile, paint, flooring cabinets tops, etc. You do not want to be buying these things direct. The best use of your time is finding more deals and selling more deals. Thats how you scale.