​Construction Manager payments

5 Replies

Hi folks,


I am looking to expand my business by providing affordable construction management services to investors located in PA (Philadelphia) and NJ. I will be directly with General Contractor and facilitate the communication among team members. Establishing and managing scheduling, resolving unforeseen construction issues, monitoring the budget and providing weekly updated reports are among the services I am looking to offer. I wanted to pick your brain to better understand the challenges and needs. I really appreciate your input.

Based on your past experience with construction managers:

1. What were the major challenges you faced and what would you do differently?

2. In your opinion, what are the most valuable attributes construction managers brought to the table?

3. Regarding payments, if you were to hire a CM again, what would be your preferredpayment method?

    A. I think it should be a flat fee per house.    B. I think it should be a discounted flat fee for multiple houses.    C. I think it should be a percentage of the construction cost.    D. I think $250 per week per house is a reasonable cost.    E. Payments should be made every 2 weeks.    F. Payment should be divided accordingly o the length of the project (deposit and draws)

   G. Other ______________________

I appreciate your feedback.

Best,

Andresa

@Andresa Lobrace

Are you wanting to be the CM at risk?  Or hired by the owner as the Owners Rep/CM to deal with the General Contractor?  The tasks you listed are the General Contractors responsibility typically in mind. Here are some industry standards you might be interested in checking out.  You might want to team up with an architect to help them with construction field services.  

https://www.csiresources.org/practice/publications/guides

@Jim Adrian

Thanks for your input. I am looking to be the Owners Rep and deal with GC directly.

I agree "the tasks listed are the General Contractors responsibility"; however, as a developer I haven't found (yet) a GC who can perform those tasks efficiently so it had forced me to create and implement systems in order to scale my business. 

Thank you for sending the link. I will check it out.

Andresa

Investors that aren't doing volumes are jot the ideal client, the pay is really low. I pitched a 6k CM Fee for a 200k 3-month project and the investor said I was insane lol. They'd rather risk a 20k CO than hiring someone who can manage their construction needs. We've been hired for a new build to co-CM a job of 23M with 6 month timeline, the PM called our quote for 30k quote very low. Basically was RFI re-routing and close out field verification on as-built. Total hours spent, 460, so it was close to ok, won't do it again though.

Originally posted by @Andresa Lobrace:

@Jim Adrian

Thanks for your input. I am looking to be the Owners Rep and deal with GC directly.

I agree "the tasks listed are the General Contractors responsibility"; however, as a developer I haven't found (yet) a GC who can perform those tasks efficiently so it had forced me to create and implement systems in order to scale my business. 

Thank you for sending the link. I will check it out.

Andresa

 What!? A GC that coordinates? lol  I feel this is there trick to create a change order to get more money.  This is why you include a bonus for finishing early and then liquidated damages for going over deadlines.   In residential I don't see the fit for a CM due the small project fees.  Clients that are in this business seem to savy enough or ok with a big change order.

Lmao @Jim Adrian that is so true! 

I am looking to assist residential investors that have multiple projects and/or don't have knowledge nor interest to manage the projects (many of them are "out of state" folks). Here in Philly, we have a lot of investors from NY who see the current opportunity to invest; however, due to logistic challenges, they can't start and finish the projects on time and on budget (without 100 thousand change orders).