Investor · Toronto, Ontario · Member since 2016 · 66 posts · 20 votes
My partner and I are both located in Canada and have recently taken some extensive training programs on flipping in the United States. In order to get started, we would be looking for for local project managers to join up with.
We would be bringing in the deal (mostly from wholesalers), developing the scope of work, financing and selling it. The role of the local project manager would be to check out local deals prior to purchase, locate and coordinate subtrades, check up on the contractors, and look in on the property regularly and when needed.
Because wholesale deals go very quickly we would need someone that can have a look at a property very quickly, within a few hours same day. So here are my questions:
- how would we best find such a local project manager?
- what is proper compensation for such services (a lump sum / hourly / a portion of the profits - and if so how much?)
Real Estate Agent · Indianapolis, IN · Member since 2012 · 20 posts · 13 votes
9y
Here's my advice on remote project managers. Find two. Use a good, licensed general contractor to oversee construction. Then hire a separate local person--could be your Realtor, home inspector, different contractor--and make them sign off on every item before releasing payment. Yes, I said hire them. You want financial accountability for your inspector. And, of course, you need a detailed, line-item contract to start with, and a detailed line-item draw schedule. Every singe change to the overall work list or per draw work list must be in writing and acknowledged by all three--investor, contractor, inspector. If your contractor can't handle this, it's a pretty good sign that it's not a contractor you want to use.
Sounds obvious, I know, but I have helped many out of town investors out of failing projects and none of them had these controls in place.
Real Estate Investor · Los Angeles, CA · Member since 2013 · 2k+ posts · 694 votes
9y
@Suzanne P. To find a remote project manager I would first call around to find a local investor friendly realtor, then get referrals from them for a project manager, or alternatively some realtors also do project management themselves. They already have contacts with service providers, contractors, that can help you fill out your team much more quickly.
As far as what to pay for such services, you can go a thousand different ways with that, and will need to negotiate depending on the extent of services provided and time spent.
For your first few properties I would suggest an hourly rate. I pay my remote realtor/pm $35/hr.
Once you have a number properties going on at the same time, then go with a weekly rate to manage all the properties in progress.
If you ever pull the trigger on a property can you PLEASE PLEASE PLEASE PROMISE (Pinky swear promise) to keep an online journal about the process. It will be the most frustrating hilarious painful read ever. I'm DYING to sit back seat and watch you slowly lose your mind.
To answer your question....
This depends on the scope of work. An easy flip (carpet paint and a little handyman work) can be babysat by the realtor. Otherwise a GC might be best. We pay our PMs 5% of our net and they typically complete the tasks within 12-20 hours of actual work. Average flip makes them lets say 1500 means they back into a pretty decent hourly wage.
Investor · Toronto, Ontario · Member since 2014 · 320 posts · 125 votes
9y
Marry one! That's what I did. :)
In all honesty, you need to build out your network. Most people leave the networking until after they have a need for someone, when it is really work that should be done upfront as during execution of any strategy you'll be relying heavily on others.
In terms of rates, most charge as a percentage of construction costs or flat weekly rate, whichever is higher.
Real Estate Agent · Indianapolis, IN · Member since 2012 · 20 posts · 13 votes
9y
Here's my advice on remote project managers. Find two. Use a good, licensed general contractor to oversee construction. Then hire a separate local person--could be your Realtor, home inspector, different contractor--and make them sign off on every item before releasing payment. Yes, I said hire them. You want financial accountability for your inspector. And, of course, you need a detailed, line-item contract to start with, and a detailed line-item draw schedule. Every singe change to the overall work list or per draw work list must be in writing and acknowledged by all three--investor, contractor, inspector. If your contractor can't handle this, it's a pretty good sign that it's not a contractor you want to use.
Sounds obvious, I know, but I have helped many out of town investors out of failing projects and none of them had these controls in place.
Investor · Toronto, Ontario · Member since 2016 · 66 posts · 20 votes
9y
Hi @Account Closed, thank you for your detailed reply, I really appreciate it. The financial accountability and control aspect is so crucial. That's where a lot of deals suffer. Great input!
Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
9y
A project manager for 20-30 an hour? That seems very low to me. A decent licensed and bonded GC can't be your gofer. And if he can, he isn't descent. It's tough flipping houses if you are local and have a good crew, starting in a new market with no contacts seems risky.
Anything local you can flip?
Good contractors typically work for only one or two guys full time. We have a few different crews that work for us full time and burned through dozens and dozens.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
9y
@Josh C. Who says anything about a GC? It's a project manager no license, no insurance, no liability, all he does is push paperwork and render reports. I'm licensed and insured, I don't know if I am good, but I don't get up in the morning and go to work for less than 500/day, that's even low to me in some of the jobs.
Flipper/Rehabber · Pickerington, OH · Member since 2012 · 230 posts · 139 votes
9y
I've been contacted by a few out of state investors who are jumping into the Columbus area to be their "boots on the ground" guy. I'm not a GC or licensed, but I've got 10 years of experience, many flips in the area, and the resources that come with it. Obviously compensation depends upon how much time I'm going to spend on the project. I'll walk through a property, do a quick inspection, and give an assessment of a rehab for $50, but if I'm expected to manage that entire rehab from demo to dusting I'm looking for a percentage of the project profit. Bottom line, it all comes down to how many hours I'm putting in.
Real Estate Broker · Chicago · Member since 2021 · 108 posts · 23 votes
4y
Answer: Understandably, there is a lack of consistency and standards with project-management professionals and the prices they charge. Experts often depend on their years of experience, number of hours available each week or month, and how much they value their time to set appropriate rates for themselves. As such, freelancers might not even list rates upfront - taking into account recognition as an expert in productivity gains them trust with potential clients - but may instead work out a deal after categorizing your objectives and needs.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
4y
This is an old thread with last activity 5 years ago. That said, even 5 years ago, $20 an hour seems cheap by CA standards for a real PM with experience; Unlicensed or not.
This is a good question though and one that has been asked several times here on BP. Finding good project managers is similar to finding good contractors. You have to sift through a bunch of garbage to find the jewels.