Investor Payroll, who's in your wallet?

[Mark Updegraff]

I thought it would be nice to hear from other investors about how their payroll came to be, and what positions are on it.

If you could rank your employees in order of importance and put a brief description of their duties that would be very helpful for young investors.

If you don't have any employees, could you elaborate on why, and maybe comment about your use of sub contractors or your methods for getting things done.

Thanks so much! I'm feeling very overwhelmed at the moment. It still seems to me like contractors are very expensive compared to employees. So if you've gone that route in lieu of contractors I would love to hear about your progression. What level of person you initially hired, how that grew, and what their duties were.

I can afford to hire one person currently, but can't decide if it is the best route or exactly who I am looking for. Any advice is greatly appreciated.

Thanks BP!
Mark

[J Scott]

Originally posted by Mark Updegraff:

John S. - So, if they quote you a weekly labor rate, what checks and balances do you use to make sure they are working the full 120 hours? Do they provide you with a project completion date? Does your construction manager handle all the supplies & delivery?

This is the reason I would never (and would never recommend) paying contractors hours/weekly/monthly. You want your contractors to have their incentives aligned with yours, and by paying based on time, their incentives are then diametrically opposed to yours (the longer the project takes, the more money they make).

If the contractors say it will take 4 weeks and are charging $2250 per week, I'd much rather set a fixed fee of $9000, which would encourage them to finish sooner -- thereby increasing their hourly earn. Doing it that way aligns incentives.

Unless you plan to be on-site 100% of the time, hourly payments will most likely hurt you in the long-run, not help you. There are a very specific exceptions to this in my experience (punch work is the best example), but those are few and far between.