One of the biggest challenges new real estate investors face is managing the construction process. Whether you’re flipping a property or renovating a rental, working with contractors efficiently can make or break your timeline and budget.

At a recent investor meetup, we had a veteran contractor and investor discuss best practices for managing contractors, and one of the most common questions was:

“Should you let your contractor handle everything—materials, labor, and scheduling—or should you stay more hands-on?”

The short answer? As a new investor, it’s crucial to be actively involved in the process. Here’s why:

1. Control Your Material Costs

Many experienced investors prefer to handle material purchases themselves rather than leaving it to their contractors. Why? Because contractors may not always prioritize cost savings, and a single trip to the store can eat up an entire day of labor.

By purchasing your own materials:
✅ You ensure quality and consistency across projects.
✅ You can shop around for the best prices.
✅ You prevent delays caused by contractors making multiple trips.

A simple way to manage this is by setting up accounts with suppliers like Home Depot or Lowe’s and establishing relationships with vendors to secure better pricing.

2. Pay for Labor, Not Markups

When contractors handle everything—labor, materials, and scheduling—they often add a markup to materials. While that might be convenient, it can significantly increase your overall costs. Instead, negotiate labor-only contracts and directly source the materials yourself.

This allows for:
✔️ More transparency in pricing.
✔️ Greater control over quality and availability.
✔️ Reduced risk of unnecessary spending.

3. Set Clear Timelines and Expectations

Time is money in real estate investing. Every extra day a project drags on means more holding costs, higher expenses, and potentially lost profits.

✅ Break the project into clear phases.
✅ Establish realistic but firm deadlines.
✅ Use milestone-based payments to keep the project moving.

For example, rather than paying upfront, structure payments based on completed work (e.g., after demo, after drywall, after finishing work). This ensures the contractor stays motivated to hit deadlines.

4. Be Present on the Job Site

Micromanaging might sound like a hassle, but when it comes to construction, oversight is essential. Even experienced investors recommend visiting the job site daily—especially early on.

✔️ Catch mistakes before they become expensive issues.
✔️ Keep the project moving by resolving questions quickly.
✔️ Build relationships with your team and ensure accountability.

If you’re managing multiple projects or scaling up, you may eventually hire a project manager, but until then, being on-site as much as possible will save you time, money, and stress.

Final Thoughts

Managing contractors effectively is a learning process, but these principles—controlling materials, paying for labor, setting clear timelines, and staying hands-on—will set you up for success.

Are you a new investor? Have you had experiences (good or bad) managing contractors? Share your thoughts in the comments!