R&G 5: How to Make Millions as General Contractor for Real Estate | Summary and Q&A

TL;DR

GC investor shares his experience of falling in love with real estate at a young age, starting with one property, becoming his own general contractor (GC), and building an eight-figure real estate portfolio. He provides insight into the importance of leveraging a W-2 income, hiring the right team, analyzing deals, and adapting to market challenges such as rising lumber prices and rental moratoriums.

Key Insights

• 👻 Becoming a GC allows the investor to control the construction process, save on costs, and earn additional profits from each project.
• 👻 Leveraging a W-2 income provides financial stability, allowing for consistent investments and growth in real estate.
• 😤 Building a reliable team of subcontractors and maintaining strong relationships with wholesalers and other industry professionals is essential for success.
• 😮 Adapting to market challenges, such as rising lumber prices and rental moratoriums, requires creativity, proactive strategies, and effective communication with tenants and contractors.

Transcript

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Questions & Answers

Q: How did you become your own general contractor (GC)?

After a negative experience with a contractor who mismanaged a project, the investor decided to become his own GC. He obtained the necessary licenses, insurance, and training to oversee construction projects and assemble a reliable team of subcontractors.

Q: How do you find deals for your real estate investments?

The investor finds deals through various channels, including networking with wholesalers, browsing social media platforms, searching Craigslist, and leveraging his connections within the real estate community. He emphasizes the importance of being proactive, consistently searching for opportunities, and making connections with other investors.

Q: How do rising lumber prices and the rental moratorium affect your real estate business?

Rising lumber prices have impacted construction costs, requiring the investor to seek alternative sources for materials and negotiate better prices. The rental moratorium has posed challenges, but the investor has creatively addressed non-payment situations through negotiated agreements and incentives to encourage tenants to vacate, allowing for quicker turnover and new rental income.

Q: What strategies do you use to analyze real estate deals?

The investor uses the 65 percent rule, which states that purchase and construction costs should not exceed 65 percent of the property's after-repair value (ARV). This approach ensures that the numbers work and allows for profitable refinancing or selling of the property. He also relies on referrals, networks with other investors, and utilizes online platforms and tools to assess deal viability.

Summary & Key Takeaways

• The investor fell in love with real estate after visiting open houses as a child and witnessing his parents' interest and success in owning multiple properties.

• He started his real estate journey by buying his first property with an FHA loan and renting out rooms to cover the mortgage.

• Leveraging his W-2 income, he expanded his portfolio by buying multiple properties, becoming his own GC, and using his job earnings to finance new acquisitions.