Have to have licensed contractor?

Question

Hey guys,

I am still looking for my first project and was wondering for you guys who rehab if you have to have a licensed contractor do the work?

The reason I ask because a family friend is a Handyman and does electrical/flooring/AC work and everything.  He currently isn't licensed but would be a ton cheaper and does quality work that I have seen from electric to complete kitchen/bathroom renovations.

If I get a conventional loan or FHA loan and live in the property do I still need a licensed contractor?

If I get a investment property loan then would I need a licensed contractor?

Has anyone gotten there GC license in order to do some of the work themselves to save money?

I live in florida by the way and thanks.

J Scott · Answer

If you're going to get the work you do permitted, you'll most likely be required by your local building inspectors to use licensed contractors to perform the work.  If you aren't pulling permits, it is unlikely anyone will check to see if the contractors are licensed or not.

Also remember that if the work you do requires permits in your jurisdiction, you may have difficult selling the property down the road if you didn't pull permits.  The new buyer may notice that work was done, check to see if permits were pulled, and when he finds out they weren't, might report you or back out of the deal.  Getting permits and inspections after work is completed can be difficult and costly.

Lastly, even if you choose to use non-licensed contractors, you will want to consider if you will require your contractors to have insurance.

I don't generally use licensed contractors for work that doesn't need to be permitted, but I always ensure my contractors are covered by insurance.

James Martin · Answer

Joseph, I am not trying to be rude but from my experience HANDYMAN and electrical does not work. Sure their are guys that can do minor electrical, but when they have no vested interest in their education and profession (their company name on the job down at the code office) they have know real interest in your success. In my area their are plenty of guys doing work without permits but if code caught you, their will be real problems and the money you tried to save is now costing you twice. I can be wrong and others may differ, but a handy man is just that, someone good for maintenance.

Aaron McGinnis · Answer

Using a handyman depends on what scale of work you're talking about, and how comfortable you are knowing that it probably wasn't done "Just right" but more like "Just good enough to maybe not start a fire/flood the house"

HVAC runs on refrigerant. Refrigerant is a controlled commodity - you need a license to buy it. If your guy is working with refrigerant, he's buying it illegally.

If by 'electrical' you mean 'swapping out the old socket for a new one', then using a handyman probably isn't a problem. Anything beyond that, call an electrician who knows exactly what he's doing, not guessing like most guys do. Even the best general-purpose guys I know tend to shy away from doing diagnostic work... there's a whole host of tools that are used for things like finding open circuits, they aren't cheap, and they are worth having. Not many people outside of dedicated sparkies have the right tools.

Check with your local secretary of state for getting a GC license. In Georgia, it's a multi-step process that, while not hard, is a giant pain in the butt and requires no small amount of time and money to get through.

James Martin · Answer

In my state we have about 6 books you have to study for the test. You will have to know how to search each questions quickly for the open book timed test. If you are good at testing no problem. But what happens in the real world of rehabbing. I would team up with a good contractor, put him to work with your projects and give him great referrals. Make him your best friend, in return you will be able to pick his brain and he will share with you about things you dont know you need to know. You will be getting the best education from someone who is actively doing rehab work. In the short and long run his prices will change for someone who helps him eat (trust me on this). The codes in my area change from time to time and I have a network of people that inform me on whats new in our market area. This will save you time and money and what better person to come out and help you with your rehab cost before you buy. Having unrealistic rehab numbers can cost you your entire deal if you did not budget correctly. I still own my very first deal thats is a not so great rental. My mentor who is a developer told me how to rehab this property and to sale it. What did smart me do , I rehab and rented it in a sellers market.

Joseph L. · Answer

Tha ms for the quick response. I was thinking more about it and would definitely want some sort of experienced license contractor working on bigger projects(electrical ,plumbing, ect) but I know he does good work for installing carpets/tile and wood floors as well as bathrooms and kithen remodling. Is it fine to use him for that type of work and should I just review the different rules to make sure everything is up to code? I was also thinking about getting a GC license to be more knowledgeable on the rules/codes in my state. Looking up the requriements now but don't think it can be as hard as the CPA test..though I could be wrong.

Have to have licensed contractor?

Most Popular Reply