Hiring a Project Manager For My Company? What To Look For?

[Account Closed]

Hello everyone,
First I must thank J Scott for the business plan template that he's made available through his website. I spent about 8 hours yesterday on it, but thank God I finally have a great business plan and the vision for my company is more clear than ever. Without your template, this would not have been possible. Thank you.

With that being said, I'm going to be hiring a part-time project manager. My goal is to complete at least 6 rehabs this year and a minimum of 2 wholesale deals per month beginning in March for a total of 20. I'm projecting the average net profit per wholesale to be about $15,000 and the average net profit per rehab to be about $40,000. As I spend this year scaling the marketing to establish a strong foundation for 2014, which will include the addition of many short sale deals, I will be evaluating the performance of that individual because I'll want to move them into a full time salary + commission position. This is a vital team member for me and a person that I want to build a lifelong relationship with. In addition as we build the company to our five year goal of 30 rehabs and 72 wholesales, they will grow with the company in income (At this point I will expect them to be earning somewhere around $300,000 as he oversees multiple projects at a time). His/her main responsibilities will be:

Preparing Written Repair Estimates For Wholesale Deals
Rehab Project Management
Weekly Project Budget Reporting
Initial Walk Through Checklist
Scope of Work Preparation
Contract & Job Bidding
Contractor Contract Signing
Post Rehab Checklist
Contractor Team Building
Locate New Contractors
Interview Contractors
Hiring/Firing Contractors
Reporting to Bookkeeper

As we start on this part time basis, what should I look for in this individual?
Also what should a part time project manager earn for this first year looking at the goals I have listed for this year. Being that the project manager will be involved in both our rehab and wholesale business, I will be compensating him/her on both. This person will be very important to the company and I am interested in everyone's opinion on both questions. Thanks a lot. God bless.

[J Scott]

Not sure how I missed this post...perhaps I need to set up some Keyword Alerts!

Here is my list of what to look for:

1. Trustworthiness. This person will represent you when you're not around, he may have access to your checkbook and bank account (mine does), he may have the authority to negotiate prices (mine does), and he'll certainly be spending time around your houses, personal property, etc. If you're not 100% trusting of this person (maybe not at the start, but eventually), it's going to defeat a lot of the purpose of having him.

2. Construction Knowledge. This person will likely be interviewing, hiring and managing contractors as the primary component of his job. If he doesn't have a decent understanding of construction practices and principles, he'll get run over by contractors and your business will suffer. How do I know? Because my PM didn't have much construction knowledge when he started, and it was a tough learning process on our first few houses.

3. Negotiation Skills. This person will be the interface between you and your subs, so you'll want to ensure that he can get you good prices.

4. Attention to Detail. This person will be creating the product you need to sell. The product needs to be flawless and therefore he needs to have a great attention to detail.

5. Ability to Manage. The biggest thing to derail rehab projects is contractors who can't keep on schedule (or managers who can't define and manage schedules). You need someone who can keep contractors updated on schedules, ensure they show up, ensure all dependencies are well defined and tracked, etc.

6. Willingness to Do Whatever it Takes. My PM does a lot of different stuff. Most of it involves what you laid out in the original post, but there are some other things that he probably didn't realize he was signing up for. For example, when an alarm goes off at one of our houses in the middle of the night, if he's closer to that house, it's his job to take care of it (I do it if I'm closer). He often prepares houses for showings on weekends in the morning and then locks them up in the evenings (again, my wife or I will do it if the houses are closer to me). I don't like talking to people on the phone, so he makes a lot of my business phone calls for me. When I'm mentoring someone, a lot of the day-to-day time I'll them spend with my PM...so he's doing some mentoring. Not to mention crawling under houses and through attics to do inspections, and other nasty stuff. Etc...

7. Handyman Skills. This one isn't a requirement (for me, at least), but it's nice to have someone who can do minor fix-it tasks. My PM will replace all outlets and switches for every project (saving us about $400), will hang mini-blinds, can do very basic carpentry/plumbing, etc. I don't generally have him do that stuff to save money (though it does), but more because I don't like having my handyman come out for a 30 minute job.

I'm sure there are other things, but those are the ones that first come to mind...

Btw, you mentioned your PM eventually earning $300K. I would suggest that if you have enough projects going on that he could earn $300K in commissions (even with a salary), you probably have more projects than one PM can handle. You'd probably rather have 3-4 PMs earning $75-100K each (or whatever is a decent salary in your area).

My PM can handle about 4-5 rehabs simultaneously, best case. That said, you might own 10 properties at a given time and only have 4-5 in the middle of rehab, so you probably don't need a second PM until you at the point where you generally own 10+ properties at a given time.

But, even when you're not doing rehab, your PM will still be doing work. For houses that you're in the process of buying, he'll be dealing with inspections, scope of work, budgets, schedules, lining up contractors, etc. And for houses that are recently completed, he'll be dealing with getting them ready for showings, dealing with inspectors/appraisers, completing inspection repairs, etc.