Working with Subcontractors: The Complete Guide

As an owner-builder, you're acting as the general contractor. That means finding, hiring, and managing subcontractors for the work you don't do yourself. This is where most owner-builders face their biggest challenges.

Done right, working with subs saves you time, gets professional results, and keeps your project on schedule. Done wrong, it leads to delays, cost overruns, failed inspections, and endless headaches.

This guide will teach you exactly how to find quality subs, negotiate fair prices, manage the work, and handle the inevitable problems that arise.

Why This Matters

The numbers: On a typical owner-builder project, subcontractors account for 40-60% of your total budget. For a $300,000 build, that's $120,000-180,000 in subcontractor costs.

Your savings: By acting as your own GC and managing subs directly, you save the 15-20% GC markup. But only if you do it well.

The risk: Poor subcontractor management is the #1 cause of owner-builder project failures. I've seen projects delayed 6-12 months and go $50,000+ over budget because of sub problems.

What You Need to Know

Managing subcontractors effectively requires understanding:

  1. When to hire vs. DIY - Which trades you can handle and which you shouldn't
  2. How to find quality subs - Where the good contractors are and how to reach them
  3. How to vet and interview - Separating pros from problems before you hire
  4. Getting accurate quotes - Understanding pricing and comparing bids properly
  5. Contracts and agreements - Protecting yourself legally and financially
  6. Day-to-day management - Scheduling, communication, and oversight
  7. Payment schedules - When and how to pay to maintain leverage
  8. Handling problems - Dealing with delays, quality issues, and disputes

The reality: You don't need to be an expert in every trade. But you do need to be an expert at managing the experts.

The Complete Subcontractor Process

Here's the roadmap we'll follow:

Phase 1: Planning

When to Hire vs. DIY →

Decide which work you'll do yourself and which you'll hire out. This decision affects your timeline, budget, and stress level.

Key topics:

Bottom line: Some work saves you money to DIY. Other work costs you money to DIY.

Phase 2: Finding Contractors

Finding Quality Subcontractors →

Learn where to find good subs and how to build a pool of quality contractors for each trade.

Key topics:

Bottom line: Great subs are booked months ahead. Start looking early.

Phase 3: Evaluation

Vetting and Interviewing Subcontractors →

Know how to evaluate subs before you hire them. This is your quality control checkpoint.

Key topics:

Bottom line: The time to catch problems is before you hire, not after.

Phase 4: Pricing

Getting and Comparing Quotes →

Understand subcontractor pricing, get accurate quotes, and compare them intelligently.

Key topics:

Bottom line: The lowest bid is rarely the best value.

Phase 5: Agreements

Contracts and Agreements →

Protect yourself with proper contracts. This is not optional.

Key topics:

Bottom line: A handshake deal will cost you thousands when things go wrong.

Phase 6: Execution

Managing Subcontractors →

Day-to-day management of subs on your jobsite. This is where your GC skills matter.

Key topics:

Bottom line: Good management prevents 90% of subcontractor problems.

Phase 7: Payment

Payment Schedules and Practices →

When and how to pay subs to maintain quality and leverage while being fair.

Key topics:

Bottom line: Pay for work completed and inspected, never for work promised.

Phase 8: Problem Resolution

Dealing with Problems and Disputes →

What to do when things go wrong (and they will).

Key topics:

Bottom line: Handle problems early, document everything, and know your options.

Common Owner-Builder Mistakes with Subs

I've watched owner-builders work with subcontractors. Here are the mistakes I see repeatedly:

1. Hiring Based on Price Alone

The mistake: Choosing the lowest bid without considering quality, reliability, or experience.

Why it happens: Trying to save money on a tight budget.

The cost: Low bidders are often:

Real example: Owner saved $3,000 choosing a low-bid electrician. The rough-in failed inspection in 14 places. Took 3 weeks and $4,500 to fix with a proper electrician.

How to avoid: Get 3-5 quotes, eliminate the highest and lowest, focus on value in the middle range.

2. Not Checking Licenses and Insurance

The mistake: Hiring someone without verifying their contractor license and insurance coverage.

Why it happens: Taking their word for it, being in a hurry, not knowing how to verify.

The cost:

Real example: Owner-builder hired "cheap" framer without license. Framing failed inspection, inspector noticed no license, red-tagged entire project. Had to tear down and rebuild framing with licensed contractor. Cost: $28,000 plus 2-month delay.

How to avoid: Always verify license (call state licensing board) and insurance (get certificate from their insurer). No exceptions.

3. Paying Too Much Upfront

The mistake: Giving large deposits (50%+ of job cost) before work starts.

Why it happens: Sub says they need it for materials, owner wants to secure the sub's schedule.

The cost: If the sub:

Real example: Owner paid $18,000 (60%) upfront to cabinet installer. Cabinets never showed up, contractor stopped returning calls. Owner had to sue (cost $4,000 in legal fees) and wait 14 months to recover partial payment ($12,000).

How to avoid: Limit deposits to 10-20%, tie payments to completion milestones, pay for work you can see and verify.

4. Poor Communication

The mistake: Unclear expectations, verbal-only agreements, assuming the sub knows what you want.

Why it happens: Being too busy, not wanting to seem controlling, assuming they're professionals who don't need direction.

The cost:

Real example: Owner told plumber "put in a shower." Plumber installed basic contractor-grade valve. Owner wanted thermostatic valve with separate volume/temp controls ($400 difference). Both felt the other was wrong. Plumber wanted extra money, owner refused. Relationship damaged, change cost $650 to fix.

How to avoid: Everything in writing, detailed scope of work, reference specific products and specs, regular check-ins.

5. No Written Contract

The mistake: Handshake deals, working from a verbal agreement or simple quote.

Why it happens: Trusting relationships, not wanting to seem difficult, not understanding the risks.

The cost: When disputes arise, you have:

Real example: Owner hired HVAC contractor with verbal agreement for $12,000. Job took 3 weeks longer than discussed, some ductwork was undersized, no warranty was provided. When owner complained, contractor said "You get what you pay for" and refused to fix issues. Owner had no contract to enforce.

How to avoid: Always use written contracts, even with friends/family. Include scope, timeline, payment terms, warranties, and dispute resolution.

6. Not Supervising the Work

The mistake: Hiring subs and assuming they'll do everything perfectly without oversight.

Why it happens: Busy with other aspects of the build, trusting that licensed contractors know what they're doing.

The cost:

Real example: Owner hired insulation contractor and didn't supervise installation. At insulation inspection, inspector found: gaps around windows, compressed insulation (reducing R-value), no air sealing, missing vapor barrier. All had to be corrected before passing. Cost: $2,800 in rework plus 10-day delay.

How to avoid: Be on site during critical work, check work before and after each phase, take photos, ask questions, verify before covering anything.

What Makes a Great Sub

After working with thousands of subcontractors, here's what separates the best from the rest:

They Show Up

Reality: This alone puts them in the top 50%.

They Communicate

Reality: Great subs prevent surprises.

They Know Code

Reality: This saves you time and money on every inspection.

They're Properly Equipped

Reality: Pros look like pros.

They Stand Behind Their Work

Reality: They care about their reputation more than one job's profit.

Your Role as the Owner-Builder GC

Managing subcontractors means you're responsible for:

Before Work Starts

During the Work

After Completion

Time commitment: Expect to spend 10-20 hours per week managing subs during active construction.

The Subcontractor Budget

Typical subcontractor costs for a 2,000 sq ft new build ($300,000 total):

Typical Subcontractor Costs for 2,000 sq ft New Build
TradeTypical Cost% of Budget
Excavation/Site Work$8,000-15,0003-5%
Foundation/Concrete$25,000-35,0008-12%
Framing$35,000-50,00012-17%
Roofing$8,000-12,0003-4%
Plumbing$15,000-22,0005-7%
Electrical$12,000-18,0004-6%
HVAC$12,000-18,0004-6%
Insulation$6,000-9,0002-3%
Drywall$12,000-18,0004-6%
Flooring$8,000-15,0003-5%
Cabinets$15,000-25,0005-8%
**Total Subs****$156,000-237,000****52-79%**

Note: These are typical ranges. Your costs will vary based on:

Timeline Expectations

How long to find and schedule quality subs:

Planning phase: 2-3 months before you need them

Booking: 4-12 weeks lead time

Bottom line: Start lining up subs 3-4 months before you need them on site.

Critical Success Factors

Three things that will make or break your subcontractor experience:

1. Start Early

The best subs are booked far in advance. If you wait until you need them, you'll get whoever's available (usually the less-busy, less-good contractors).

Action: Build your sub team 3-4 months before breaking ground.

2. Use Contracts Always

No exceptions. Every sub, every trade, every time. A simple written agreement prevents 90% of disputes.

Action: Use proper contracts with clear scope, timeline, and payment terms.

3. Pay Fair, Pay on Time

Good subs will prioritize clients who pay fairly and promptly. Being cheap or slow with payments gets you bumped down the schedule.

Action: Price isn't everything. Pay market rates, pay when you agree to pay, and build long-term relationships.

Getting Started

Ready to build your subcontractor team? Start here:

Step 1: Decide What to Hire Out

When to Hire vs. DIY →

Determine which trades you'll handle and which you'll hire. This affects everything else.

Step 2: Start Finding Subs

Finding Quality Subs →

Begin building your contractor list 3-4 months before you need them.

Step 3: Learn to Evaluate Them

Vetting and Interviewing →

Know how to separate quality contractors from problems before you hire.

Next Steps

The eight guides in this section will teach you everything you need to know about working with subcontractors:

  1. When to Hire vs. DIY → - Make smart decisions about which work to contract out

  2. Finding Quality Subs → - Learn where and how to find reliable contractors

  3. Vetting and Interviewing → - Evaluate contractors before you hire them

  4. Getting Quotes → - Request, receive, and compare bids intelligently

  5. Contracts and Agreements → - Protect yourself with proper contracts

  6. Managing Subs → - Day-to-day management for quality and schedule

  7. Payment Schedules → - When and how to pay for maximum protection

  8. Dealing with Problems → - Handle delays, quality issues, and disputes

Work through these guides in order, and you'll have the knowledge to manage subcontractors like a professional general contractor.

Ready to start building your subcontractor team? Use our templates and checklists to help you through the hiring and management process.