Cost plus percentage or cost plus fixed?

[Greg Boney]

Hello BP,

We are getting ready to begin our first rehab.  It will be quite extensive (for us) as the property is in need of major renovation.  We are wondering what is the recommended payment method when dealing with a General Contractor? 

Should we use cost plus 20 which he recommends, cost plus a fixed amount or is there a better way all together.  We have received a general breakdown of estimated costs but are concerned that we me be left holding the bag if he has underestimated.

Thank you,

Greg