On some house flips, it just doesn’t make sense to hire a general contractor. Your budget might be just a little too tight and you need to do more DIY work than usual, or you might not have enough work to justify bringing in a general contractor. On these jobs, instead of trying to keep all of your balls in the air without any help, I recommend hiring a project manager.
If you’re going to hire a project manager, though, you should know that the job is going to be different than it would be for a general contractor. With a general contractor, you’re hiring someone to take care of the whole project. They bring their own crew in to do all of the construction, handle permitting, and order materials.
With a project manager, you’re hiring someone with construction and rehab experience who’s going to find subcontractors to do the work on your property’s rehabs. They’ll make sure that everything is organized and moving forward on deadline, and, depending on your agreement, they may order materials for you, as well. If you’re like me and Christina, though, you’ll probably want to take care of getting your own countertops, tiles, and other design-related materials.
Hiring a Good Project Manager
For a successful project, you’re going to have to hire a good project manager. You can start by talking with builders and carpenters who have experience with the kind of work you need, but you should make sure that they have experience organizing and managing projects, as well as actually performing them. Remember, your project manager is not actually going to do any of the work—they’re just going to make sure that all of the subcontractors are on task, on time, and organized.
They’re there to make sure that everything is under control and going smoothly, so it’s best to hire someone with great organizational skills who has experience with project management on construction projects.
Make Sure Your Expectations Are in Line
When you sit down with your project manager, you’ll want to make sure that everyone’s responsibilities are mapped out. If you’re taking care of acquiring some of the materials for the job, that should be clear so that there’s no doubling up and so nothing gets overlooked. If you’re expecting your project manager to take care of ordering all of your materials, they should know that, and you should know what they’re going to charge you for it.
Project managers typically charge about 20% less than general contractors, and the whole process isn’t much more hands-on for you than it would be if you hired a general contractor. However, there are some differences, and you may be expected to be a bit more active in the day-to-day progress of your rehabs.
If you’re just getting started and you don’t have a lot of house flips in progress at once, hiring a project manager is a great way to get to know the construction side of the real estate investment business. You can save some money in exchange for a little bit more of your time, and you’ll learn a few things along the way, too.
As you start working on more house flips simultaneously, you may find that you’re better off with a general contractor instead of a project manager, but you may also find that you prefer to work closely with your project manager on some projects while hiring a general contractor for others. Christina and I go back and forth between project managers and general contractors, depending on our budgets and margins for different projects. As you get more experience, you’ll learn how to pick and choose the best people for each job.
