GC (General Contractor)
The licensed professional who manages a construction or rehab project — hiring and coordinating subcontractors, pulling permits, and delivering the scope of work. Lenders may vet your GC on rehab loans.
A general contractor (GC) is the licensed professional who manages and executes a construction or renovation project. On a fix-and-flip or ground-up build, the GC is the single point of accountability: they hire and coordinate the trades (subcontractors), order materials, pull permits, keep the job on schedule, and deliver the agreed scope of work.
What a GC does
- Hires and manages subcontractors — framers, electricians, plumbers, HVAC, drywall, painters, finish carpenters.
- Pulls permits and schedules municipal inspections.
- Orders and sequences materials so the job flows.
- Manages the budget and timeline against the scope of work.
- Stands behind the work — warranty and code compliance.
The GC typically charges a fee or markup — often 10–20% of the project cost — for this management and risk-bearing.
GC vs. self-managing (owner-builder)
Investors choose between hiring a GC or acting as their own (owner-builder):
| Hire a GC | Self-manage |
|---|---|
| One accountable party | You coordinate every trade |
| Costs the GC fee/markup | Saves the fee |
| Less of your time | Significant time and expertise |
| GC's subs and licensing | You source subs, may need permits in your name |
Newer investors usually benefit from a competent GC; experienced flippers with reliable subs sometimes self-manage to capture the GC's margin. Either way, the hard costs of materials and labor are the same — the question is who manages them and at what fee.
Why lenders care about your GC
On rehab loans, the GC affects the lender's risk, so lenders may:
- Vet the contractor — license, insurance, references, sometimes a track record.
- Require a signed contract and detailed scope of work before funding.
- Pay draws against inspected work, sometimes jointly to the borrower and GC.
A credible GC with a clear contract and budget makes a rehab loan smoother to approve and fund; a vague arrangement or an unlicensed contractor can slow or complicate financing.
Practical guidance for investors
- Vet thoroughly. License, insurance, references, and recent comparable projects. The GC can make or break a flip.
- Get a detailed contract and scope. Line-item pricing tied to your scope of work protects you and aligns with how the lender funds draws.
- Align payments with draws. Structure GC payments around the lender's draw schedule so you're not floating large sums between inspections.
- Watch the GC fee in your budget. The 10–20% markup is a real cost — include it when you underwrite against ARV and the 70% rule.
A strong GC relationship is one of the most valuable assets an active flipper has — reliable execution on time and on budget is what turns a good deal on paper into an actual profit.
Frequently asked questions
How much does a general contractor charge?
Typically a fee or markup of about 10–20% of the project cost for managing the job — hiring and coordinating subcontractors, pulling permits, ordering materials, and standing behind the work. The exact figure depends on project size, complexity, and your market. It's a real budget line to include in your flip math.
Should I hire a GC or manage the rehab myself?
It depends on your experience and time. A competent GC gives you one accountable party and saves you from coordinating every trade, at the cost of their fee. Experienced flippers with reliable subcontractors sometimes self-manage to capture that margin. Newer investors usually benefit from hiring a vetted GC.
Do lenders care who my contractor is?
On rehab loans, often yes. Lenders may vet the GC's license, insurance, and references, require a signed contract and detailed scope of work before funding, and pay draws against inspected work. A credible contractor makes the loan smoother to approve; a vague or unlicensed arrangement can complicate it.