Joe Homs, a real estate investor with over 40 years' experience, explains when to hire a general contractor for house flips. A GC handles licensing and insurance, speeds up the job, and manages subcontractors, but owner-builder work in California requires specific disclosures. The choice depends on your experience level and how many projects you're juggling.
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In today's video, we're going to talk about whether you should hire a general contractor or do it on your own. Coming right up. Rehabbing is one of the major components of the real estate business. A property in need of rehab is often where the money can be made, but doing a good quality rehab and bringing it to completion is not easy as there are many potential bumps along the way. But do you need a general contractor to oversee and coordinate all this work, or should you act as your own general contractor? If you're new here, I'm Joe. I've been an investor, broker, and mentor for over 40 years. I made this channel for the new and experienced investor, those who want to create the life they've always wanted through real estate. Make sure that you subscribe so that you never miss a thing. Let's talk about what's a general contractor. A general contractor is a person that is licensed in your state, licensed to do certain type of work. By the meaning of general, he can do a lot more work than a specific contractor like, you know, electrical contractor, plumbing contractor. A general oversees all these contractors. underneath him, which are called subcontractors. You ask, why hire a general contractor? And the best answer I can give you is the expertise, the licensing, the insurance that goes along with that, and obviously the crew that they have. They can go into a project and finish it within a certain amount of time. If you're managing the project or even if you're doing it yourself, you're one person. So it's going to take you way longer to do this project than to just give it to a general contractor who can do it possibly in half the time that you can do it. So I get asked, should I hire a general contractor? And that's really up to you or a specific job that you're doing. Again, a general contractor, as it gets more difficult in the rehab process, Is something that we do. We also like at the end of the day that here in California it's a disclosure state, so we have to disclose everything that we do on the property. And so we disclose that, you know, the kitchen cabinets and plumbing and electrical, all that was done and supervised by a general contractor. It just makes the buyer feel better at the end of the day, as opposed to if you did it yourself. what's usually called owner-builder. And then when you disclose it, you say, yeah, I set that tile down, or I painted this, or I worked on this electrical. At that point, buyers start to question, okay, what is your expertise? Do you even have a license? How can I trust that you did the work correctly? So you have to factor all those items into the choice whether you're gonna hire a general contractor or do it yourself as an owner-builder. What I do personally is I just hire a general contractor, and we have about 3 contractors that we work with right now. We've got about 12 projects right now that we're doing. I like to give each contractor 3 or 4 projects so that they're timely with the projects. If I, if I give one contractor All 12, he's going to have to jump from one to the other, and it's not going to be done in a timely manner. So be aware of that. One contractor, at least in my experience, can handle about 3 or 4 projects. And remember, these are 3 or 4 projects that I'm doing. He may be doing 3 or 4 for another flipper or, or doing side jobs someplace else for some, some Somebody else. So it's always important that when you do hire a contractor, you don't overload them, and you also manage the project as well. I hate going to a project, I show up and there's nobody there. I'm on the phone to the contractor, where are you guys at? What are they doing? Why are they not here? You know, create an urgency. This is your project, you want to get it done as quick as possible. So I do hire contractors again because it's a lot quicker, my jobs go a lot quicker, and then I always have that fallback that it's a licensed person that's doing this. He has insurance, I have insurance, the buyers at the end of the day feel good about asking about who did this, this, and this. Bigger and more complicated jobs may require you to hire a general contractor. These type of jobs can be very complicated, and the money that you pay a general contractor will be well worth it. Still, I suggest that you manage the manager and check on your job frequently. If you're new to hiring contractors, click on this video right here. I go over all the questions that you need to ask to make sure that you're hiring the right person. Feel free to reach out anytime. I'm here to help.
