Hiring Project Managers and expectations

[Devin Hughes]

Hey BP community! This question is for the investors with some experience, especially experience working with a Project Manager. 

As I have posted in the past, I am currently an active duty Aircraft Mechanic in the Air Force and have been for 11 years. In that time, I have supervised and managed many projects and programs as well as countless personnel. I am looking at the possibility of separating and working in the Real Estate field in the Tampa, Florida area to increase my education to put toward my own investing career. My wife recently sent me this BP blog on becoming a Project manager as an option at which I would likely excel. It essentially says that you can do it without experience, which I don't have in REI construction specifically. However, I somehow doubt that part of it. This leads me to my question: if/when you hire a project manager, what are your expectations? How do you begin the relationship? Are they responsible for hiring the contractors, or just staying on top of them to ensure the project is done on time and on budget? Would you hire an inexperienced Project Manager? Would you let one work for you at little to no financial cost but help them learn the process and take some of the more tedious tasks off your plate?

Thank you all in advance for your input!

[Will Barnard]

To me, project management is not just hiring subs, scheduling, and making sure they remain on task, it also includes quality control, value engineering suggestions, selecting or organizing design selections (what vanity, what light fixture, what paint color goes where, etc). It also includes research on finding the best deals by shopping numerous vendors for materials and supplies, dealing with city inspections and their inspectors, and managing employees if you have them.

While a GC should know how to project manage, most can’t get past the simple hiring of subs. They are disorganized, don’t show up or are not tough enough on their sub selections to keep them showing up when they are suppose to and very few can work well with design. This is where a solid project manager comes into play. Similar to a buy and hold strategy where you need to hire a property manager, the owner or someone from his or her team still needs to manage the property manager. Project management personnel are the ones that help manage the GC and subs along with many other tasks.

1% of the total expenses for compensation is quite low in my opinion, granted if you are training them and providing them on the job experience, that is worth something too but on a $100k rehab, to make only $1000 for that would not come close to enough to attract most quality people (even if they have no prior experience). 
unless you are extremely experienced in this field, I would not hire someone new, rather find a quality and experienced project manager and go from there. You can always make adjustments on the next projects if need be.