Project Manager - To Be or Not to Be

The ink has just dried on the closing documents for the GREATEST FLIP EVER! Your analysis of the potential profit says that in 6 months you should be cashing a healthy check that mas made the hunt worth all of the setup work. The euphoria of winning the deal is wearing off and you’ve come to the sobering realization that it’s time to start the rehab. Your analysis was spot on, but it’s all for not if you cannot stick to a timeline and a budget.

There are many, many stories about how not managing a project effectively has come back to bite even the most experienced of flippers. House Flipping: 5 Vital Tips for Success (Based on My Mistakes!) . In general, it’s best to have a professional take care of the scheduling and budgeting, but for some, there is no choice but to use a little elbow grease and do things for themselves. Here’s a quick review of those options for managing the work.

Since time is money, let’s look at saving you a bit of money.

General Contractor

Many rehabbers defer to the time tested practice of hiring a General Contractor. GCs are a fantastic way to take a hands off approach to managing the project and all of the hard work in coordinating with subcontractors. If there is enough room in your budget, this option allows for you to hire someone who knows the business really well and provides one point of contact for you through the process. The downside is that a GC will mark up all of the services by 10% or more. If you use this option, make sure you understand what the GC is responsible for coordinating and be prepared to pick up those loose ends.

Even though you hire a GC, remember that you are still responsible for the budget and timeline. You should spend time with your GC on a regular basis to ensure everything is on track.

Hiring a Project Manager

Hiring a Project Manager (PM) is an alternative to hiring a GC. Generally speaking, Project Managers are a more cost effective option for hiring out your project tracking tasks. A PM takes on many of the same tasks as a GC, but may have the hands on experience. A good project manager will provide you one point of contact and knows the intimate details contained within the following paragraphs. They will coordinate everything and more. Here's a good article on BP.

Becoming your own Project Manager

Managing the flip on your rehabs is not an easy task. Coordinating all of the contractors to get the work done on time and on budget can be intimidating. You’ll need to understand how to set and track timelines, budgets and changes orders all while making sure you play well in the sandbox with multiple personalities.

Coming Attractions

In some upcoming posts, I'll cover more detail about becoming your own PM.  Budgets and timelines and reporting, OH MY!