General Contractor

What it is

A general contractor is a licensed professional who manages a construction project: pulls permits, hires and schedules subs, handles inspections, takes on the liability. On a flip, a GC takes the project off your plate and puts their name on the line with the city. In exchange, they charge you 15-40% on top of trade costs for the service.

Most solo flippers don’t need one. That’s the core insight. The miy method replaces the GC role with the investor acting as their own project manager. You hire subs directly, run your own schedule, and keep the 15-40% margin. Trade licenses still belong to the people doing the work — plumbers, electricians, HVAC — but the GC-level coordination runs through you.

I actually own a construction company. I have 20 active projects going on right now, and I manage those projects with no payroll, no boss, and no hammer — except at home where my wife’s my boss and she makes me do things around the house. The point is: the GC function doesn’t require a GC. It requires showing up and setting expectations.

Why it matters

The GC markup is one of the largest hidden costs in a flip. On a $60,000 renovation, a GC adds $9,000-$24,000 for management, scheduling, and warranty. For an investor doing volume, that margin is the business. Giving it away to a third party turns a profitable flip into a break-even flip.

There’s also an alignment problem. A GC is running their own business on top of yours. Their incentives include keeping their crew busy, smoothing their own cash flow, and protecting their margin. Those don’t always line up with yours. Vision isn’t outsourced well. Nobody cares about your numbers like you do.

Here’s the thing that took me a long time to understand: construction basically just costs what it costs. Trying to get a $60,000 job done for $45,000 usually means hiring cheap contractors who cut corners, or micromanaging the crap out of every detail. With cheap contractors, you usually end up paying the difference in mistakes and theft. With micromanaging, you spend so much time on one project that your hourly rate is terrible. So the GC question isn’t really about cutting labor costs — it’s about cutting the management layer overhead.

That said, GCs earn their margin in specific situations: full gut jobs with heavy MEP, additions, commercial work, or any project where you’re working a day job and genuinely can’t be on site. Those are the places where the markup is the tuition you pay for not being there.

How it shows up

The depth chart of subs is what replaces the GC. On a $60K cosmetic renovation, run MIY, you coordinate 6-10 subs directly: demo, plumber, electrician, HVAC tune-up, drywall, paint, flooring, cabinets, handyman, final clean. You’re the hub. You set scope, approve work, pay on completion. Total cost: the bids plus a small buffer. Same job through a GC: $75,000-$85,000.

One move I’ll sometimes use: pay a licensed GC $500 for an honest bid on a specific job you know you won’t hire them for. You get a real market baseline. On deals where you’re outside your experience, it’s cheap insurance.

Related

miy method, contractors, depth chart, jobs menu, fear tax, lazy pm