Need organizational advice on managing hour paid project manager and crew

5 Replies

morning everyone !

I'm starting a new project where I have hired a project manager with the agreed terms:

A 4 man crew with one being the project manager will be there at all times ($70/hr for the 4 man crew).

My goal is to do everything possible on the front end and throughout to eliminate problems and challenges during the process from a time management ; construction management ; and from a contractor / landlord communication standpoint.

Thanks in advance for advice on these 3 points

I hate paying people by the HR. I like to pay people by the job and align their goals with mine which is to finish the property. 

@Westin Hudnall  

I recently completed a sizable rehab on a large 1904 built home (divided into a duplex) and paid the crew hourly.  Looking back I would have to agree with @Peter MacKercher  that paying hourly for a sizable project is a bad idea.  I ran into the crew showing up and doing "work" but they lost track of the end goal of completing the project on time and on quality.  Then when they had another project come up they were ready to get everything wrapped up and didn't get me to the finish line like we agreed.  I had little leverage because I wasn't holding the last installment of their payment like I would have been if we had priced on a project basis opposed to a project basis.

Get everything you want completed clearing outline in a statement of work and have them bid the job.  Spend significant time on this and ensure you have thought through everything, inevitably you will leave something out but get as close as you can.  This is not the step to be lazy on and will pay you back for your thoroughness. Then you can go right done the checklist and ensure everything is done or they don't get paid.  

Best of Luck with the project

Scott Dixon

The property manager wants to prove his worth and is willing to pay for all materials and not receive a payment for him or his crew until completion.

Keep the advice coming !

If you pay by the hour, you need to be actively involved.  The manager could be getting in over his head and a legal mess could ensue when he comes for payment.  You should establish a target budget and timing and have him work toward those and track closely.  I can't imagine not having progress payments over a large job.  More definition is better than less to avoid surprises to both of you.

I have done a lot of project management in the corporate world and limited in the real estate world. But my advice would be to establish a bonus if the work is done earlier than estimated or a late penalty if the work is later.   You have to be careful how you structure these though because they could try to take advantage of you.  I would however suggest that you meet with you project manager at least a few times a week on the job site to verify that the project is progressing.  As he builds confidence, you can move to a more hand off role.   

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