Question about contract

[Julia Newman]

Rookiest question of the day. I am working on my first rental renovation. First time working with contractor. He has given me a line item quote that includes phasing, budget for materials, etc. I am sourcing/purchasing hardward, tiles, flooring, countertops and working with a friend/designer on that. We are about to sign a contract to get going and he is asking 15% O&P contract, not including materials. We will be meeting this week to discuss but I am hoping to get feedback here so I feel more confident going into the conversation.

Can someone explain to me the details of this? What is a standard payment schedule? Does he take 15% only on subs/labor? Will the budget he gives me on line items for subs change and what would cause variations? He didn't include this 15% on the original budget sheet so I am having to readjust what I thought this would cost. Thanks, everyone.

And before anyone gets scared- this is a family home I recently inherited and is a great entry point into investing. It needs a lot of work, but there is already a ton of equity in it. It's a good learning opportunity.