I have partnered with contractors on several flips and in what we do is agree to pay the contractor for labor and materials he supplies. 

It’s all about supply and demand.

Returns are through the roof, economy is growing with Amazon, ABC Supply and Dollar General among others, and the price to enter the market is very low.

The well for his rental is dry (we are in a drought)- we have him hooked up to our office next door to supply him with water.

In general I like the west side of town a lot better as supply is limited by geography whereas the east side has much less natural restriction to growth. 

.$216k, 3.1%, $1200/mo (Conventional Loan [refinanced from VA], no money down, 30 year Fixed Rate)BRAND NEW Roof ($19.5k insurance claim, cost me $1k), Newly fenced in back yard, Original AC Unit (Circa 2000)STR (Rented 10 months of the year while I was deployed)$27.5k Gross (~80% occupancy rates)$20.5k Net (Estimated, I don't have my tax returns handy)Monthly CAPEX (including supplies): ~$500/moSpeculative Potential: $32.5k Gross Annually (~$24.5k net)Based on the performance of my other STR, I could net an extra $4k on this home if I marketed better and adjusted my prices.

In addition to normal real estate expenses you will pay utilities, cable/internet, cleaning fees if you hire a cleaner, supplies such as toilet paper, paper towels, and other amenities you will provide.

If the answer is no then you have to change your strategy, meaning find a new city that can supply those types of returns.

Some of this may be a function of supply/demand in Austin too and lender's bullish nature on lending given what the regulators will allow them to do with this part of their concentration.  

What supplies do you provide?