What fees should a project manager receive for a difficult rehab?
Hi there!
I recently teamed up with two partners to sponsor the acquisition and management of a portfolio of five distressed multifamily properties totaling 41 units. All buildings have leaky roofs, faulty heaters, poor foundations and very dated interiors. The previous owner was basically a slumlord and tenants knew it. We received a rehab loan upfront and will be doing $250,000-$300,000 of repairs to develop a baseline for these buildings. The team and I have recently decided that I will be managing the contracts and construction projects and be additionally compensated for my role.
My question is around what is a fair price for my work? I will still be having other tasks in my owner/management role so this would be considered a job. I understand that industry standard is between 7 & 15% of invoices depending on the complexity of the project. We originally said that I would get 7% of the invoiced contracts but after getting into this a little bit, I feel that given the complexity of the project, I should charge 10%. This will be my first project management job of its kind in the industry, but I have been a project manager in another field for nearly a decade and am not new to issuing contracts to construction.
Questions:
- 1) What is a fair price for an owner/sponsor to receive for an addition role of construction project manager on a major renovation/rehab?
- 2) To what degree does the complexity of the project impact the commission?
- 3) Are there other factors that I should be considering?
Thank you!
-Chelsea