How to and Why Real Estate Investors Should Become General Contractors


hey what’s up friends leaders and
investors it’s Nicole Purvy the founder of Better Than Success and today I’m
going to talk about you as a real estate investor the possibility of you getting
your GC license becoming an actual GC in the city of Philadelphia right so some
of the things I’m going to talk about are things that are very specific to
becoming a GC in Philadelphia many of you are watching from all around the
world so some rules are going to change and some of those are going to be
different but for the most part the concepts are going to be the same and
you just have to do a little bit of research in your city and your county
and your municipality and find out what it’s going to actually take to become a
general contractor for in real estate right so here are some of the pros why
would you even do this like if you’re a real estate investor why would you want
to go ahead and become a general contractor get your license and do all
the things I’m going to tell you that you’re going to do because it’s a lot of
work right why would you actually do it so a couple of reasons number one is it
gives you control over your actual real estate rehab project right rather than
working with a general contractor a third party who could be working on
multiple projects at one time you can have control the other thing about it is
you guys know that even the best general contractors they’re a little flaky
there’s always issues like that’s one of the most difficult things about doing
real estate is finding good general contractors and subcontractors if you
can cut off that middleman and have some control then you know it’s better for
you as an investor I do want to warn you though right
becoming a general contractor is not for everybody it’s a lot of risk involved
and what do I mean by a lot of risk so if you are a general contractor the
there’s a lot of responsibility on you in terms of safety as well as
financially right so what do I mean by that you’re going to take a class and
we’ll go over this in a minute you’re gonna pick a class called the
OSHA 30 in this class it’s really all about safety it’s about safety in the
workplace but also building safely so if something happens with a project that
you were going this is a huge responsibility I think I really need you
to understand this if something happens with the project that you work on five
ten years later and the investigation comes back that you were negligent or
you did something wrong or you did something erroneous you could be charged
criminally and civilly right so a while ago here in Philadelphia a building
collect on a major road and it was a major building and it collapsed and
people got paralyzed and people even died and guess what these people were
charged criminally the G C’s that work on this project years prior they were
charged criminally because we found out that they cut some corner so whether you
cut corners or it’s pure ignorant the responsibility comes back on you so that
is why it is important that you understand the perils of becoming a GC
with that being said the best of the pros of becoming a GC you can this is
one of the reasons that I’m making this video is because I talked about this in
one of my email blasts so we have literally probably almost every real
estate investor in our database in Philadelphia and with that being said I
sent out an email blast and I mentioned that I got my GC license and I mentioned
this particular benefit and everybody DM to me about it they messaged me they
emails me they came to our meetings for those of you who don’t know we hold
meetings in Philadelphia free real estate classes in Philadelphia every
Wednesday night non-members is free your first time after that you have to pay or
either join and so every Wednesday night here at 2930 Jasper Street people were
coming to me asking me about this so here’s one of the years that may
benefit not the main benefit but one of the big benefits that people are hung up
on you get if you’re using a hard money loan you get to build your stuff in to
get paid when you submit your scope of work you can do one of two things you
can either do the work at cost right so you’re running the project your GC in
the project and you’re just paying your subs right and so that lowers your
construction call or you can put your GC company which is going to be separate
than a company that you’re actually borrowing you’re actually doing the
rehab with those two different companies you can put your GC company in as a line
item and literally pay yourself when you take your drawers if you have questions
about hard money loans you can go to flips dot loans and you’ll see our
playlist that we created about hard money loans right so you can either get
paid or you can face depends on you and the structure of your deals depending on
your goals and it also depends on whatever is important to you right so
you can absolutely take advantage of it so let me tell you another reason why I
actually ended up getting my GC license and this is very timely
so back in April March and April May we hope that a class here at better than
success right and our amazing office space we hosted a class a project
management construction management class hosted by Brick House Builders her name
is @Brickhousebuilders on Instagram and this class with a five week intensive
construction management class this class did not make you a GC but it helps you
to understand how to project manage right we can teach you all these real
estate classes in the world and you can watch all the YouTube videos but there
are things that you don’t know that you won’t know until you get into your first
project and we tried to cover as much of it and teach people the actual process
and I don’t say we try we successfully did it the class was amazing it changed
my life like there very few classes that we have here we literally doing two
classes a month I mean two classes a week and real estate classes here –
better than success at least two classes a week and most of them are business
changing but not life changing and so this one was life changing we’re
actually offering the class coming up soon as a recording of this video and
all get 2019 August 17 through the 18 I keep forgetting what the dates are
because the class that weekend whatever that weekend is gonna be all day
Saturday all day Sunday in Atlantic City and the tickets include your hotel stage
so it’s gonna be like a retreat it’s gonna be awesome and amazing and super
duper fun so I say oh this to say that we are running the class back again so
you can go – better than success com4 slash construction if you want to get
access to the class but one of the things we talked about in the class is
getting your GC license and as you take the class you get to kind of see a
holistic view and with me already have done projects before right like I have
already successfully flipped and rehabs houses before I still got a better
holistic view and I made the decision to actually get the GC license of which we
covered the process and I’m gonna give you just a quick process here as well so
I failed it to say that becoming a GC it has its pros and it’s cons right a lot
of responsibility financially safety wise but it also has its pros and if you
really want to dive deep in project management right because when you go and
take the required materials to get the classes that I’m going to tell you about
to get your GC license it doesn’t actually tell you how to be a GC they
just want to make sure that you’re out here moving safely that is what the GC
license does it does not tell you how to be a GC which is a whole art form right
so that is what our construction management class is designed to do okay
done for selling the class for right now so
let me tell you how to actually get the license I’m gonna give you the set so
the first thing that you want to do is I have my my laptop here because um this
is actually my second time recording this video for those of you who know me
know that I’m a one-take wonder I used to do it for the first time right away
by myself but I wanted to go in our lab that I didn’t go into all of the
resources that you have for taking the OSHA 30 so the OSHA 30 is a certificate
that you have to get before anything happens it’s a thirty hour class that
teaches you the safety behind being a general contractor and you can take this
class through a number of resources the city has the list of resources online
but I’m gonna give them to you you can use something called advanced
online career safe click safety pure safety red vector summit training source
Turner Construction University of South Florida and I’m gonna give you the these
all these resources in the description of this video so these are the places
that you can take the OSHA 30 class is a 30 hour class right utterly boring but
it’s very very important okay so after you take your OSHA 30 class you’re gonna
need to wait for your OSHA 30 card to come in the mail so you’re gonna have
your OSHA 30 car and it’s gonna be awesome you’re gonna be so excited like
oh my god I’m oh shit thirty certified perfect the next thing that you’re gonna
do is you are going to get your you’re gonna have to have a certain amount of
insurances let me back up before you do your insurances you’re going to want to
become an LLC or some sort of entity you want to can talk to your accountant
about what’s the best entity for you but you’re going to need to get become an
entity right you’re gonna need to get your EIN your tech ID and you’re gonna
need to become an entity now it’s really easy to do it online but I’m no
accountant nor my attorney I’m not going to tell you how
to do that there are some resources that can help you with actually setting up
your business right because this is the part of setting up the business for the
construction company setting up the business doesn’t mean that you have the
right to actually do that business right so you’re going to set up the business
you can reach out to common ground management if you’re in Philadelphia or
appear anywhere actually you can reach out to common ground management they can
help you get your AI e I N or and your your LLC or your S corp documents
whatever it is that you need to do to establish yourself as an entity and
whatever state you’re in the owners name is Dom Landry D as in Delta o M as in
Mary Dom Landry and I’ll put their contact information down below as well
so you want to set up your entity right the next thing that you’re going to need
to do is you’re going to need to get your business activities license and
you’re going to need to also get a Philly tax ID if you’re in Philadelphia
that is a separate text ID using your federal tax ID right so you’re going to
get your you can do both of these things online first thing is you need to get
your text ID and then you have to get your text ID your city tax ID thing I
need to get your business activities license then for some reason when I did
it so I’ve done this multiple times for multiple businesses usually I can do it
online but for some reason for when I went to get my GC license I was able to
get my business activities license but I couldn’t get my no I was able to get my
city tax ID but I couldn’t get the business activities license online so I
had to actually go through the Municipal Building in downtown Philadelphia to
actually get it okay the next thing that you’re going to need is you’re going to
need to have the proper insurances so you’re going to need to get your your
general contractors insurance your business insurance and insurance is
relatively expensive for the year for me it cost 1700 bucks right and so your
typical insurance agent may not do this but they usually have a
connect there are some limits some statutory limits that you’re going to
need to get this insurance in you can’t just get this insurance and not be
properly covered so let me give you the limits really quickly I’m pulling it up
in my new actually I’m pulling it up from the notes from our project
management class this is the type of stuff that we go over this is like very
small aspects of the things that we go over so you’re going to need what is
comprehensive general liability insurance a minimum limit of 500,000 per
occurrence so that is what cost me about $1,700
not again not every natural regular run in the middle insurance person like your
auto insurance person he may not do it but he’ll know someone that actually do
it then the next thing you need to do is you’re gonna need to take your
automobile insurance your regular car insurance that you drive around with
you’re going to need to take that and increase the limit to three hundred
thousand statutory limits it’s a fly in here I’m sorry the summer time and if
you want to need to increase it to three hundred thousand statutory limits the
next thing you’re going to need to is you’re going to need I can never
remember I always want to call it like unemployment insurance but that’s not
what is the workers comp insurance right but you’re going to need workers comp
insurance if you plan on having employees but if you don’t plan on
having employees remember you’re a general contractor and you can literally
sub everything out so these people are w-9 staff they’re 1099 those or whatever
right like their subs they’re not your employees so if you don’t think I’ll
have any employees there is a workaround for this you have to get type of a piece
of paper that says I Nicole per B of Hertha City construction that’s the name
of my construction company has zero employees that’s all you need to type on
there take that and get it notarized very very simple right you take that and
get it notarized if you don’t plan on having employees and then you are going
to all of these documents you want to take
your insurance document right though let me go back when you get the the general
liability insurance the company that underwrote you or the
broker they immediately send it to the city of Philadelphia but you want to get
a copy of everything and you’re going to print that out just in case they don’t
automatically send it or unless they can’t find it or whatever right then
you’re going to take your auto insurance that you just increased it’s a three
hundred thousand you’re going to take that and you’re going to print off your
declaration speech not your proof of insurance your declarations page that
you will absolutely have to print so you’re gonna take those two printed
documents plus your OSHA car plus the notarized document or your workers comp
insurance and you are going to take that oh and your your city your business
activities license and also the page you may not even need this but the page that
has your text your city tax ID on it and then you’re going to take all this down
I think I also printed off my my the the LLC documents that you got from the
state when you set up your business right so if you use common ground
management they’re going to give you the document I even took my tax ID my
federal tax ID page down there put all this into a manila envelope cuz you
never know what they’re going to ask you and your OSHA car and you want to take
it and you’re gonna go through the Municipal Building and you’re gonna sit
there for hours and wait for them to call take your turn
call you up and then you’re going to write them a check or they they take
like electronic check cost a hundred dollars and voila you are now a general
contractor this is a beautiful thing but again I do not want you to forget about
the responsibilities that come with it right this just means that you all this
whole process means that you understand the house would be safe but
it doesn’t mean that you are a great project manager because that is a whole
arts right it doesn’t mean that you are a great financial manage the financials
bookkeeper because that is a whole art and it just so happens that we are
offering classes coming up for both of these things all right so if you’re in
Philadelphia again or Jersey or whatever if you want to sign up for our
construction management class go to better than success comp or recessed
instruction and then we also have in Philadelphia coming up it’s only a few
days of recording this video but perhaps we’ll run it back we’re going to be
running a real estate QuickBooks class I can’t wait because I’m terrible at
QuickBooks I have a very archaic system for managing all my books on all of my
my my rehab and it is very very archaic system I use Excel and so we have a
class where a CPA is going to be coming and teaching you guys teaching everybody
for four hours how to manage their book so I say all that this day you become a
GP doesn’t mean you know how to do all this other stuff it is a huge
responsibility and it’s not for everyone it’s just not if you already have a
regular job and you are investing great don’t try to become a GC it’s just not
at this point that’s because you’re not even going to have time like you have a
regular job you know you’re gonna have time to do it
hire a GC pay the person make sure you build it into the numbers and that’s
just is what it is I don’t Tommy I don’t have a job I’ve been an entrepreneur for
nine years though I can I can run around actually today I’m gonna go and check on
one of my rehab and just a little bit actually I’m gonna run a check on two of
them cuz they’re very close to each other and then I have a meeting with a
partner about another rehab and blah blah blah blah these are the things you
can do when you Tommy from Martin and you ain’t got no job
all right guys love you all love you all I hope you all make a whole bunch of
money and I hope that this helped out and and so next time
happy entrepreneur

13 comments

  • Very informative. Thanks.

  • Great energy and info. Keep it up!

  • You look beautiful! Thanks for the info

  • Exactly what I was looking for thanks.

  • This was very well explained, Thanks!

  • Loved the video on real estate investing. I'm doing something pretty similar over on my channel.

  • Thanks Nicole, this was very detailed. Which insurance company did you get your insurance through and when is the next construction management class?

  • Smart and very relatable, I would come up to philly from VA to take your class. You got a new subbie!

  • Fantastic video. What a beautiful smile Nicole. You have pretty much defined my world. I'm about to graduate with my construction management bachelors degree, I'm a certified carpenter, and am planning on getting my real estate license as well. Triple threat in certain regards, but risky in certain ways as well. Gotta play the cards right.
    I highly recommend anyone who is interested in getting into the construction sector to start by getting their OSHA 30. They go through the entire OSHA 20 CFR 1926 standards book.
    At the core, construction is all about safety. Safety in the design and engineering, safety in the building process, and safety in the final product leading to the certificate of occupancy for the client.

  • love you Nicki

  • BigBrother InLife

    Glad I found your YouTube Channel, im in Md. I signed up for a course to help me become a GC. Been working in Construction as Carpentry 5 years. Definitely will be tuning in for more if your content.

  • BigBrother InLife

    When is the next Construction Class in 2020

Leave a Reply

Your email address will not be published. Required fields are marked *