All Forum Posts by: Deyano M.

I agree 100%. I really don't need to be a GC to reach my goals.

I've thought about getting a license but it takes 3 years here in MA. The primary reason I wouldn't however is the added costs of running a business and the tax repercussions. I have a full time job in the corporate world but with a GC license and other business activities/costs it all goes from investing to running a business. The IRS would tax my profits much differently and it would create more administrative work for me.

It's still an option in the future but not right now while I have another full time job.

I agree Justin-

I might have been more strategic in my approach when I presented the plans and broke it into phases. I'll try that next time.

And definitely agree- whatever the inspector says, goes. Which is why I have jumped fast to switch gears....

BTW- like your website. I have alot of family out in AZ. How is the market? Improving?

Thx J- good info.

I think up here it is town by town. All contractors I have spoken to mentioned it is probably just this particular town.

The reason this all came to fruition is because one contractor I hired did not want to do any interior work- his bids on all exterior renovations was the best and his work is top notch. My interior guy however did not want to pull all the permits unless he subbed out the exterior (which would have been much more expense.) So I had to shift my game-plan slightly and it should all work out.

By large scale I mean: adding on, complete gut and renovation, 3000+ sq ft. $1M+ neighborhood, and very large budget.

This isn't a lipstick on the ole pig flip.

I think I'm good. I just had to shift the budget around unexpectedly. I'll plan ahead for this next time.

I'm not going to rehash that whole misconception. The GC and all contractors I hire are on the same team. We are all seeing eye to eye.

Nobody is risking anything or doing something they don't want to do. Infact, it is the opposite. Everyone wants the work.

Let me make this simple. Here is my new question: are other investors seeing this alot with building inspectors? (Inspectors asking for only a GC to pull everything and not allowing an investor to pull permits or to divide the permits up for different phases.)

I'll also say- please only reply if you are doing large scale rehabs.

Thank you to those that have answered the question seriously.

Thx Aria. Good advice.

Do you allow the GC to sub everything or do you stay involved? What % is the GC taking, or did you work out a deal?

The GC I am working with is willing to work on an hourly basis with x-amount of weekly check-ins instead of charging a flat % of the total job. It will probably save me $10K easily.

He is interested in my next project since he is doing the entire exterior, windows, roof, siding and framing.

I was thinking it would be a good idea to form a good working partnership so I'm not caught off-guard again!

Hey Justin- good advice. Thx.

Hey Aaron. I should provide more details. I think you might have gotten the wrong idea.

First of all- I'm not trying to snub anyone. The GC I intent to hire was already part of my 'team' and slated to do the addition, framing, and all exterior portions of the project (roof, siding, windows) until weather-tight.

He actually suggested I pull the permits. My rough idea was he pull permits for his portion of the project, close them out and then the rest of my guys pull separately. This has worked perfectly before. Nothing illegal about that. I use a master electrician, plumber, and carpenter. These guys are top notch.

We all were on the same page and our time-line was in place. The curveball came when the inspector asked for only one permit to be pulled. He wants one contractor pulling for the entire scope (apart from the trades).

I went back to the table and let them know what was going on. We have all come to an agreement and tweaked our plan to accommodate what the inspector wants.

It is new for the GC as he normally sticks to exterior projects and framing. He became very receptive after we discussed the entire project and in actuality, he makes more money.

These guys respect me because I give them alot of work and future work is on the table. Nobody is asking anyone to do something they don't want to do.

I was simply caught off-guard because this is something I didn't plan for. I realized later that doing the addition (in this particular town) probably is what made the inspector react that way.

It's a large project. 4bed/3.5 bath - 3200 sq. ft.

I manage up to $10M global supply chain implementations for the Government in my 'other' career. This project is something completely controlled and calculated.

As far as GCs getting taken to the cleaners. Look around - most of them end up in trouble on their own. Hiring friends and getting shafted.

I have several GCs that have begged to bring me on board as a PM but that is not my goal.

So anyway- nobody is getting screwed here.

Alot of contractors up here use their insurance as a leverage chip, "my insurance costs are so high etc". I've offered to pay any added operating costs before and that conversation ends fairly quickly. It's negotiating 101 folks. Really- that was not my question.

I just wanted to know if others were seeing that alot.

Thx all-

Jon- thx for replying. I like the Phoenix you have!

That's exactly what I'll be doing- having the GC use my subs and not mingle with my negotiating. It will cost me but we'll work something out.

Here in MA getting a GC (Construction Supervisor) license is complex. I've thought about it but then I'd have to carry workman's comp and insurance and the entire equation changes. That was not in my immediate plan for investing. It would change things with the IRS and I'm not sure I want to go that route.

From your experience, is that just an inspector being picky or a real hurdle I need to prepare for moving forward?

Hello folks-

Recently ran into a curve-ball.

I have a large rehab currently just started. Interior demo is done. I have all the subs lined up, bids in place, and ready to proceed with framers. (we are doing a small 2nd floor addition to allow us to reconfigure the first floor and add space).

Went by with my plans to the Town and they said I can't pull permits if the house is not owner occupied. The inspector also mentioned that because of the scope of the project he would want a licensed GC pulling permits. I'm not licensed, I'm an investor.

I had thought each sub could pull their own and I could PM which is what I'm used to.

Didn't see that coming. Not a big deal- I have alot of contacts and immediately asked a contractor about pulling a permit for the entire scope of the project. To my surprise he was hesitant. He would prefer to bring in all his 'friends' in the trades and guys he knows even though I have everything already lined up. Asked 2-3 other contractors I know and got different responses but all seemed to revolve around the pricing going much higher because they would be pulling permits for the entire job- not just a part of the rehab.

Obviously, this will cut into my profit. I think I can work a deal out with someone but I just didn't anticipate this.

Any advice? Did the Inspector just blindside me or do others run into this? I will mention, it is an exclusive town and then happen to be fairly strict.

Cheers people-
D

Cheers John- thanks for responding....

We have consulted with two large national banks/lenders and were not informed of any penalties in our situation. My wife and I could go after the loan on our own I suppose, although my Mother has better credit than both of us (over 800). Our income is more than adequate to handle the project- I might re-inquire given this new though process you have suggested. Thank you-

Black Wolf