How do you pay your project manager?

Hello everyone,
We are new to flipping and we were wondering how everyone pays their project manager? Do you pay them a percentage of the profit? We have someone who will be our project manager/general contractor. My husband will also be helping with the work too.
thanks for any ideas you may have.


10% plus home and utes for seasoned or 8% plus home and utes for green is what I pay in almost every case.

Richard Stephens

I’m not sure that the answer you got was relevant to your question.

Are you asking how you pay someone who oversees the work on a renovation or someone who lives on site at a multi-family property?

I think you’re asking about the former, whereas the first answer you got appearst to be, at least to me, about the latter.

If you have someone managing a renovation for you, that person is basically your general contractor. You should simply agree to a scope of work at a fixed amount of money and whatever the difference is between that amount and the actual cost would be the manager’s profit. If he goofs, he’s out of pocket, not you.

I would not suggest that you just pay someone for “managing” other tradespeople on the job.

Thank you for the information. This person would be over seeing the project as well as doing some of the work also. He would not be living there.
He would basically be the general contractor as well. I didn’t know what would be a fair amount for that position.

Not sure exactly what the project manager would be doing. If it is GC, then profits for that business are usually 10-16% above labor and materials costs. If they bring something more, then what is it? Really as an owner I think you should be “project managing” it yourself.

This person would be the GC basically. He was saying that he wanted a percentage of the profit when it sold. I don’t know if I am 100% comfortable with that. This is our first flip.
He is also a friend of ours as well. I would be overseeing everything as well as doing work as well.

The bottom line is a general contractor puts in a bid for the work needed on the house. How much you make on it is none of their business unless they are a partner. You two agree on a price you will pay them for the work they will be doing. That’s it. My contractors have NO IDEA what I make per house because once again… NONE OF THEIR BUSINESS. Good luck. :beer

A contractor who wants a backend piece can be a wonderful asset. Ask if you can pay half his fee in cash and half out of the backend upon sale. This participation keeps him focused on completion and quality. Highly recommend this approach!