Family/Boots on the Ground compensation?

Question

We are preparing to do fix and flips long distance in a city where we have plenty of family. We’ll have a realtor on the team and set up systems for the contractor team to provide us with video and picture updates.

That said, there’s nothing like folks who are exclusively in it for you. My in-laws would be our go to folks to have eyes on the rehab process and walk rehabs on a regular basis. They are retired and love this stuff — like would legitimately enjoy talking with contractors, walking the site, taking videos, the whole deal.

I want to make sure they are compensated for their time since they will be a major value add. Have others had a similar set up? What sort of compensation set up could you see working well in this set up? All thoughts and recommendations welcomed!

Shawn Parsh · Answer

James,

You have been given solid advice, but I will add my input. If the family members are helping you with the project in anyway I would pay them. It is your business so you decide how much to pay. I would pay them after the property has been flipped and you receive the funds.

What is great about finding people to help you build your business is that the more you reward them the more they will likely contribute. I have had a lot of luck getting people to find me deals that are not even listed because I pay a finders fee. It essentially means that I have people working to build my business that I only have to pay with they get results. The same holds true with family members. I have hired family members to help on rehabs many times. The more people you have working to build your business the more success you will likely have. Not to mention you will be sharing the profit with those you care about. Good luck.

Bill J Fay · Answer

Project managers usually work with the GC to help coordinate the project. If permits are needed, you must check to see if you can pull them as the homeowner or need a General Contractor to do so. A GC will be very helpful if you are just getting started, especially if you are out of state.

James Likis · Answer

Thank you, @Shawn Parsh. I like your framing of more folks to help build the business. Great to hear concrete examples of how you’ve done that.

James Likis · Answer

Thank you @Bill J Fay. Agreed on treating them like a business partner.

Is a project manager typically a choice to do instead of a general contractor? Or in collaboration with? Sorry that’s a rookie question, but curious because I hadn’t thought of outsourcing a project manager role given it’d be a single flip at a time to start.

Bill J Fay · Answer

If they are providing value you can pay them as a project manager. Either a flat fee or a % of profit. This should be only if they are providing value, not just popping in and reporting back to you. Even though they are family, I recommend you treat them as business partner in this scenario.

Family/Boots on the Ground compensation?

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