what is the builder fair fees other than a % of Tot cost ?

[Tarek Soliman]

HI BP community 

I have a land that I want to build several houses on it, and I am looking for a good a builder who I will going to have good sustainable long  term relationship. since I am building those houses for rent  and not my own dream house, so they must be as efficient as possible and quality for rent.  But the builders fees are determined by a percentage of the total cost, and I feel there is conflict of interest. I want to build with  lowest cost and good quality, but his fees build on the total cost. 

Question:

what are the good deals with the builders to replace the percentage of total cost? 

Pleas keep in mind that I want to keep him for the long term. and he is needs 

more projects. 

every suggestion is appreciated it 

[Scott Ryne]

As a contractor for 35 yrs, this is my take. You are paying for my time. I set the value of my time based on my experience, knowledge and my ability to complete the project on time, on budget and at the level of quality you desire. To me the cost of the project is irrelevant. I can build a 1200 sf 3/2 that costs 100k, in the exact same amount of time that I can build one that costs 150K. Assuming a fee at 10% of cost, would did I do to earn an extra 5K for the same amount of time?

As an investor, what is most important to you when you hire a contractor? The project is completed on time, on budget, and at a level of quality you desire, right? Therefore, that is where the contractor should earn his money. That is where I earn my money. Bonuses. If I don't deliver on time and on budget I don't earn what I feel my time is worth. If I don't deliver, you have my fee to compensate you for the cost of my delay.

For all the contractors out there that are going to jump on me, I have language in the contract to protect me from delays beyond my control.

To me, anyone paid on a percentage basis for anything they do, is either underpaid or over paid for for the service they provide. This includes servers and real estate agents among others.