Project Manager for 1st fix and flip

[Janetta C.]

Hey Guys!

I'm ready to enter the world of investing and met with a contractor today who offered to be the project manager for my first fix and flip. His fees include an initial 10K project manager fee then 10% fee after selling of the flip. As the project manager he would secure all permits and inspections, hire the crew for rehab and manage them, stage the home for listing, and can guarantee completion within 4 months (120 days or less). If he does not finish before to the agreed upon date he would pay $1,000 a week for every week the project was extended. I thought this was a bit expensive but considering my background is in healthcare and I'm new to investing I thought this arrangement could be a good deal. We discussed using a hard money lender for financing and thus the 120 days for completion timeline. I'll be investing in the Richmond, Virginia market. Any thoughts on this arrangement would be greatly appreciated. 

Thanks! 

Moe

[Patti Robertson]

That’s way too much. Contractors generally build in 15% of the rehab cost for their fee.