What is a going rate on general contractor fees today?
I am under contract on a flip that is not in my area so I will be hiring a GC to manage the renovation on this project. I am not familiar with the rates for GC services so wondering what advice any of you could give. Is it standard to pay a fee or a % on profit of the project or both? Have you incentivized a GC with bonuses to meeting or exceeding cost/schedules? I have been serving as my own GC on all my projects up to this point so not sure how to approach it. Any advice would be appreciated. Thanks!
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Hi Jason!
That is kind of complicated, depending on the scope of the project. Contractors usually bid the job... They don't necessarily break down all the components and then charge you a fee to manage it, etc. The will typically estimate the job and mark up all the products and services. Some will let you look under the hood and negotiate, but most won't.
You'll get a lot of opinions from, "just hire all the subs yourself and manage it" to "listen to everything the contractor says." It's somewhere in the middle.
As a brief, useful source of info, I recommend the sections of David Greene's BRRRR book on contractors. Explains a lot about different ways they operate and what you can do to ensure a good relationship, good work, and reasonable prices. I had been investing for a while when I read it and still found a lot of practical advice.