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Unread 07-15-2022, 07:22 AM   #1
Just In Tile LLC
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Taking the steps to become a general/remodel contractor

Good murnin, as the title states I'd like to take the next step and start managing different facets of the building process.

I see a trend around here but I believe it extends everywhere, that GC's are no longer keeping their own employees but sub everything. I'd be most interested in that style as far as learning.

In general, the parts that seem daunting are any legal requirements that change from being a sub to a GC? Not sure what needs to change on my part, but any info to get me on the right track would be helpful.

As far as contractor customer relations I know how to go through my process for tile; bidding,scheduling,payment scheduling etc... but are there important changes that happen when you become a GC that aren't intuitive stepping up from a sub prospective?

Any and all information would be helpful
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Unread 07-15-2022, 04:32 PM   #2
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Gonna need lots of cash or really good credit to manage your cash flow in order to keep your subs and vendors happy.
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Unread 07-15-2022, 04:49 PM   #3
PC7060
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I dislike working with “people-less” general contractor, it’s like working with an building trades accountant.

The best ones have a crew that specializes in a specific area, such as rough framing or final trim out. If I was going to be a GC I would have a 3-4 person crew that specialize in final trim out which would allow you to include higher margin specialities such as bathrooms and kitchen renovations in your offering. And the final trim out is often the most challenging area to find qualified subs.
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Unread 07-15-2022, 05:54 PM   #4
cx
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One of the first things you're gonna notice, Justin, is that you're now responsible for everything. When you're the tile contractor, you're responsible for the tile work. But when you're the GC and you subcontract the tile work, you're now responsible for the tile work again, but maybe you're not doing the work. Can be a good bit more frustrating.

And you're responsible for the framing and the doors and windows and exterior cladding and the roofing and the plumbing and the electric and the interior trim and the painting and the carpets and other floor coverings and...everything.

I never had any employees when I was building houses. I was quite capable of doing a lot of the work of a lot of the trades, which is very helpful when you've got to stand behind their work and need to know what's correct and lacking. I was on site every day, which my personal attitude required, and made for a much better job because whenever a question came up (many, many, many times), there was someone there to answer. It also allowed for far less substandard work being covered up.

When building outside a code compliance jurisdiction (most of my houses), I kept the electrical work and the interior trim and cabinet work for myself. Allowed me to make some money while keeping an eye on the rest of the project (The Great State of Texas no longer allows me to do electrical work even out in the county).

I would always hafta subcontract jobs such as drywall and insulation and rockwork, things I can actually do a bit of, but don't wanna do at all and don't do well and can't possibly do fast enough in a large application. Same with framing and concrete finishing and many other specialties.

I would not build a new house today, not even for a previous customer, though, as I found it quite impossible to find useful subcontractors for most of the work. People today don't even feel it necessary to bother returning a phone call to tell you they're just too busy to get to your job. Very frustrating, that.

Now, if profit is your primary motivation, having permanent crews for all your work and starting a new house at least once a month might fit your style. I could never do that, which is why I never made the big bucks. But I built a lot of really nice houses that made me and my customers happy.

Different strokes. My advice would be to pretend you never thought it might be a good idea to be a GC in the residential housing market.
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Unread 07-16-2022, 06:28 AM   #5
PC7060
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Quote:
Originally Posted by CX
I was quite capable of doing a lot of the work of a lot of the trades, which is very helpful when you've got to stand behind their work and need to know what's correct and lacking. I was on site every day, which my personal attitude required, and made for a much better job because whenever a question came up (many, many, many times), there was someone there to answer. It also allowed for far less substandard work being covered up
Whole lot of truth in this statement. It’s very frustrating when you have a GC and they’re not there to deal with questions (many, many, many!!!) from the trades or inspect to make sure the trades are performing up to an acceptable standard. And if you’re not there as the GC the sub will often ask anybody who happens to be around and take that as gospel.
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Unread 07-17-2022, 01:16 AM   #6
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What your state requires of you for licensing can be fairly easy and cheap, to quite daunting and expensive. There's probably a state contractor's licensing board that can help you navigate all that.

You'll need some liability insurance, which won't be cheap, and maybe even some workman's compensation insurance.

And I'll echo what CX said about getting and keeping subs. Many won't call you back now just to tell you they can't do your job. And when they are willing, they may raise the price 20%, and tell you to find someone else if you don't like it.

If you're doing a custom house on someone's land, you can get regular draws, but if it's a spec house, you'll get to pay several hundred dollars a month for interest on your construction loan. That comes right out of your pocket.

It's a lot to think about.
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Unread 07-17-2022, 11:04 AM   #7
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This is a step that I took a few years ago when I started specializing in bathroom renovations.

We have more regulations than you guys but I just had to change my license over and pay more for my bond and insurance.

I work one job at a time, I still do my own tile, and I'm on the job almost every day.

For subs, it can be difficult to get good subs when you need them because you are the small fish and they are going to give preference to their bigger accounts. Here's what I've found helps:
  1. Schedule them ahead of time and try not to move that date, if at all possible. Even if it means the project sits for a day because you put a cushion in and were ready ahead of time.
  2. Have the job completely ready for them. This includes cleaning out the room, vacuuming, having a parking place ready for them. Sometimes, I even do part of their work like cutting the floor out to access the drain and having a piece cut to replace the subfloor.
  3. I pay immediately. As soon as their bill arrives I will write the check and mail it that night.


Pretty soon, you'll have a reputation for being ready and paying promptly and they'll be more inclined to move you up on their priority list.

Finally, I've found it helpful to try and have a backup sub for every trade. Someone you can call if something doesn't work out with sub#1.

That way, when your longtime finish carpenter moves to Montana you're not up a creek trying replacements that you know nothing about.
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Unread 07-17-2022, 12:28 PM   #8
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No registrar of contractors in Texas. You can be a GC as soon as you get your business cards back from the printer
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Unread 07-21-2022, 01:28 PM   #9
Just In Tile LLC
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I really appreciate all the information and hard truths people have given.

I know I've been guilty for not always returning every call during peak season, I've had some people fall through the cracks before.

I'm in the beginning of Jim's shoes where I can tackle a smaller bathroom remodel, but for me I can't really scale up without subbing out certain work otherwise I'd be at a job too long and become less efficient..plus it can just be too much work that my body can't handle solo when I'm doing it all. I'm also getting bored of just tile all the time, especially since I see so much subpar work being done around me that I get this crazy idea that I can deliver better work even if I'm managing the process...

Ya'll have given some great advice and hopefully the thread will continue to get feedback but I have a lot to ponder.
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Unread 07-23-2022, 02:15 PM   #10
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It's amazing to me how many builders and remodel contractors don't know what they're doing and are never on the job. They trust their subs more than they should. Some will come by the job for about 10 minutes a day just to make sure everything is going okay.
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Unread 07-24-2022, 08:37 AM   #11
Just In Tile LLC
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That’s exactly why I see it as a potential for me, I see way less qualified people running jobs and I’m thinking, I know how to take a cut and do better at managing and being on the job. Not saying it’ll be an easy road, but man the odds seem in my favor.
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Unread 07-24-2022, 08:05 PM   #12
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A friend of mine did it like this, he started out doing odds and end like a handyman kinda, then he started doing work for a investor that was flipping houses, Air bnb's and rentals. Then he bought a run down house for cheap and started flipping houses. He would either buy up and shine a turd or a comple gut that he would profit more on because he bought it so cheap and was doing the house with his 2 guys. As he started to grown and get his name out there he stopped doing work for the investor ( I know 3 people that don't know each other that have all stopped doing work for her because she pays so cheap) and started focusing on just his rehabs. Then the investor 's sister offered to loan him money to start building houses

So he went bat shit and started buying vacant lots build and sold houses on them and the bought a big piece of property and split it up and great return on the investment and a clause in the contract that say he gets to build the house when they are ready. Now he build 26 town homes and later this year's starts on a subdivision that is behind schedule because of the flu-19. . He says now all he does is drive from house to house and take phone calls

The individual houses most are around 1/2-1million, I am sure the town homes will be some where in the $300k mark
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Unread 07-25-2022, 11:09 AM   #13
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Thers a guy a few towns over that was a good tilesetter. Did lots of bathroom tile and minor remodels and wanted to start doing what you want to do. He had two helpers who were very good and very teachable. One of them got their plumbing license and the others brother was an electrician. He had all the right people. He started to focus on nothing but mid to high end bathroom remodels and contracted the whole job from start to finish. The customers only had to deal with his company for their whole package. He said it was the best business decision he ever made. Hes booked out almost 18 months.
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Unread 07-30-2022, 01:09 PM   #14
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"He started to focus on nothing but mid to high end bathroom remodels and contracted the whole job from start to finish. The customers only had to deal with his company for their whole package. He said it was the best business decision he ever made. Hes booked out almost 18 months."

This is what I've started and even updated my website to reflect it. I've already learned that I will only do a clients tile or I will GC the whole job. Nothing in-between.
I recently helped a client with design and sent him my list of local distributors to select finish materials and he went to some place else and picked out EVERYTHING. So no money made for me on those products.
Then along with doing all the demo he said he'd do the carpentry and he "knows a guy" who can do the drywall. So much time down the drain for me. I send him my tile estimate and the plumbers estimate and told him to call me when he's ready for the tile to be installed.
Also, I'm focusing on higher end jobs ONLY.
I'll GC for a smaller job, but it's not gonna be cheap and the client still has to stay out of the way.
A remodel client needs to ok the design and select the finishes. Basically anything else and they're in the way.
I started to GC because too many designers and clients were doing boring remodels. Too much subway tile. No thank you!
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Unread 07-31-2022, 01:13 PM   #15
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NEVER let a customer start to become part of the G/C process. You either go with me for the whole package or find someone else.
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