Being my own Contractor in Texas

Rehabbing, Fix and Flip, Rental Properties
1

I have an opportunity to purchase a vacant lot cheap and am thinking of building a rental property. I read somewhere that in Texas, I can’t be my own contractor without being a licensed builder. Does anyone have knowledge about this?

Any input is appreaciated.
Greg

2

I don’t know about Texas, but here in Michigan you can only pull homeowner permits, without licensing, for a home in which you will personally occupy (for at least one year after).

Any home for sale or rent that is altered requiring permit must have the permit pulled by a licensed contractor.

It is probably the same in Texas.

Call your local building department.

Question: Do you know how to do this work yourself? If you truly do, you may find a GC who is flexible in allowing you to perform some of the non-critical work yourself (trim, insulation, finish flooring, etc); just as long as his payment isn’t held up by you taking a long time to complete the work.

A good GC that will allow you to do this is hard to find.

Tom

3

Here where I am, you can pull a permit if you own the property or if you are a licensed contractor. They are death on follow-up inspections by the issuing authority, though…

Keith

4

I don’t want to do the work myself. I just want to be the guy that oversees the work and subs out the work. I guess this is called the general contractor. Just trying to find a way to hang on to a few more dollars.

5

I am in Houston, you don’t need a license to build a house here in Texas.

6

There are no licensing requirements for GC’s in Texas.

In Texas you have to be licensed to perform HVAC or Electrical work. I’m pretty sure that plumbers don’t HAVE to be licensed but there is a licensing board for them, so I’m not 100% sure.

7

Thanks everyone. DFW, do you have any experience in this area. If so, I’d love to pick your brain a little. I live in the DFW area.

Thanks,
Greg

8

Sure, shoot, what do you want to know?

9

Well this would be my first opportunity to do something like this so the list is pretty long. From chosing subcontractors to inspections to timeframes and good sources of info. If you’re available for a lunch next week I’d love to buy you lunch and meet with you.

Thanks for the help.
You can also reach me by the email address in my profile.
Greg

10

Greg,

Those are called “spec” loans. What you would do is get an interim loan for the construction phase of the project; then after the house is complete you market it for sale or refinance it into your name using any of the multitude of programs available. Typically a bank will loan 75-80% of final appraised value or 100% of construction cost including land. At closing they pay of the land and the builder takes out “draws” as the construction phases are completed. The borrower pay interest only on the money that is drawn out of the construction account. There are other construction loans available, the interim is just my favorite. Acting as your own contractor can be a bit hairy when it comes to financing. Most place ask for a lower LTV when the buyer is also the builder.

11

Thanks, I own the lot so that should make things a bit easier. It’s on the tax roles for $28K.

12

Anyone know about Wisconsin? I was planning on contracting and doing the work myself (to properties I will be rehabbing to sell). I know that in my own town you can do anything you want (get a building permit for) to your own residence except plumbing. Must be licensed for plumbing…

Jeff