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Ravi P.
  • Investor
  • Schaumburg, IL
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218
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GC margins?

Ravi P.
  • Investor
  • Schaumburg, IL
Posted Feb 8 2016, 18:24

Sorry this is a repost.

We bid a renovation project to 3 GCs. I have only received 1 response so far. But the GC accidentally sent me a breakdown of his subs cost associated with the project with his mark up 45% plus a 5% kick back fee to the interior designers that referred him. So I am looking at a 50% mark up. I know the GC provides a service and deserves to be compensated for his services, so long as he earns it. But I am curious to see what is the typical GC mark up. My understanding is that most GCs get paid on a cost plus method similar to this one but I am shocked by the margin of the mark up. The other 2 GCs are independent of the interior designers.

Another issue, for another day, is the kick back fee to the designers. I paid them a reasonable flat fee for there services. The fact they are pushing their contractors makes me skeptical. I felt like they were pushy, but I assumed they wanted to work with people they know.  I now know the real reason. The fee they would have made on the kick back would have doubled their income on the project.Their kickback fee was never disclosed. And I paid them up front 

What I really want to know is what is a typical GC fee. The renovation project should cost about 100k.

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