I’ve been asked by a few real estate investors to consider doing some project managing for their renovation projects. I’m considering establishing and systematizing a project management firm for this specific niche, working with residential and small multi family investors who need someone to oversee the renovation process. I have the necessary field experience from being a contractor to perform very well but not so much in terms of operating this type of business. What is the typical fee structure? What kind of responsibilities besides the norm of managing subs and schedules? Any ideas, insight, or suggestions on where to begin or where to get the proper knowledge is helpful and greatly appreciated.

Originally posted by @Laden Brooks III :

I’ve been asked by a few real estate investors to consider doing some project managing for their renovation projects. I’m considering establishing and systematizing a project management firm for this specific niche, working with residential and small multi family investors who need someone to oversee the renovation process. I have the necessary field experience from being a contractor to perform very well but not so much in terms of operating this type of business. What is the typical fee structure? What kind of responsibilities besides the norm of managing subs and schedules? Any ideas, insight, or suggestions on where to begin or where to get the proper knowledge is helpful and greatly appreciated.

There are lots of things to consider and be aware of. 

You have to be licensed as a GC in most states to manage projects for others as well as your own projects if you are renting or selling. 

You will need workers comp and general liability insurance and a solid CM contract. Fees are typically 10% for smaller residential and can drop to 5% for large projects and commercial projects over a million.

 You really need to be an expert in the business and know your numbers, know construction and how to lead. 

@Greg Dickerson I am registered, bonded, and insured with the City of Cleveland and 3 surrounding suburbs already. I have been doing small scale renovations for a few years. Like kitchen and bath remodels and a handful of whole house updates nothing too major though mostly cosmetic add a plug here or there. Me and my team came up learning together so managing them is easy, having to manage other established contractors who will most likely be older than me is where I’m not confident. And I was thinking 10% that’s what I’ve been seeing a lot in rehabs under 100k. Thanks for the advice.

@Greg Dickerson also is there a resource for solid CM contracts or should I reach out to an attorney for drafting something like that?

Originally posted by @Laden Brooks III :

@Greg Dickerson also is there a resource for solid CM contracts or should I reach out to an attorney for drafting something like that?

Make sure to check with your state about the licensing requirements. Yes you should get an attorney that practice is construction law to draft a project management agreement for you. You do not want to be responsible for any bills or payments or the cost of any warranty work if you are just managing the project and the investors are paying all of the bills and all of the subs directly.

If you already have a GC license, then why only do the PM work, why not do it all? Hire each sub, project manage, and make 15%-20%. If you were not licensed, you could still PM but the owner would need to pay and hire and contract each sub (not you) and you would only make sure the contracted subs showed up, performed the work in a timely and quality manner, organize each sub, etc. Since you don't have all the experience in this yet, I would suggest you use your GC license and perform each job as the GC adding the necessary PM work any GC has to do anyways.

@Laden Brooks III will you be performing Div 01 work (CSI) as well? If so, make sure that you account for that in your fee structure as well as your markup on sub’s costs

@Laden Brooks III will the contracts with the subcontractors be between you and them, or between the clients and them? How will budget and schedules overruns be handled as well as overall project liability and warrantee?

Originally posted by @Laden Brooks III :

I’ve been asked by a few real estate investors to consider doing some project managing for their renovation projects. I’m considering establishing and systematizing a project management firm for this specific niche, working with residential and small multi family investors who need someone to oversee the renovation process. I have the necessary field experience from being a contractor to perform very well but not so much in terms of operating this type of business. What is the typical fee structure? What kind of responsibilities besides the norm of managing subs and schedules? Any ideas, insight, or suggestions on where to begin or where to get the proper knowledge is helpful and greatly appreciated.

 Hey man, I remember you coming by our office earlier in the year and talking contracting. You have enough knowledge on construction through yourself and your team that you can do well as a reliable contractor, instead of a project manager. You should clear 18-20% profit margin on your projects as a GC with staff and subs, just make sure to have clean and detailed customer contracts, subcontractor agreements, and insurance / registration in place and renewed every year.

@Jad Boudiab Yes I remember and I still have you at the top of my list when I start investing myself. Thanks for initially reaching out and speaking with me, look forward to us working together in the future.

@Parker Eberhard All great questions I will get clear on that. What I’m getting from this is to basically just be the GC if that works for them, I’ll talk it over and see what they say. Thanks.

@Will Barnard Great Idea. They suggested the PM position but maybe what they need is a good GC. I’ll shoot them the idea and go from there. Thanks again.