Multifamily Value-Add Rehab - Construction/Project Manager?

[David Elerman]

Hey All - I'm interested in going through with a multifamily value-add project. I've been involved for a few years now on the investing side and have worked with a few developers/owners. However, most of my experience has been within the Acquisitions and Asset Management side of things, with minimal Construction Management experience. I know firsthand how important that skillset is.

I'm planning on purchasing a MF property in the 80-120 unit range with a value-add business plan. In terms of the rehab, I'm shooting for mostly cosmetic rehabs. I won't be splitting up units, moving around plumbing/electric, or anything that is a relatively heavy lift.

However, when dealing with so many units, even on a cosmetic scale, I am fully aware that those mistakes can quickly compound from a cost perspective.

The market I am interested in purchasing is not in my state, and considering that I have limited construction experience, I wanted to explore hiring a construction manager/project manager for a value-add project to handle/oversee everything. What are the costs usually? 5% on total capex/hard costs? How do the terms usually work? Are there better alternatives that may be better? I still plan on coming to visit the property often, but boots on the ground with experience can help dramatically.

Any advice would be greatly appreciated.