Compensation for BRRR project manager

[Amanda Williams]

Hello All,

I recently hired someone to help with managing a 60K renovation I have going on with a BRRR property. He has experience managing new builds and does some of his own handyman work. Great guy, but is not quite managing the schedule and flow of contractors as efficiently as I would like. My initial plan was to pay him 10% of labor cost that he arranges/manages and hourly for any work that he does himself. Last week he sent me an invoice for 3 hours to go pick up some materials that the contractor on the job should have handled. I don't think he is trying to "milk" me, I just think he is trying to figure this out. He has a lot of potential and I have a lot of deals going on and would rather not be on this job multiple times per week. I feel like I need to provide some more direction to him and more clearly define his compensation structure. I would love any thoughts, experience, or ideas on how to approach this with him and how to compensate him for a successful outcome for us both! Thanks!

[Whitney Hutten]

@Amanda Williams That tough.  I would pay him a flat fee and bonus him for an on time, on budget, quality job.  The one issue here is it is very hard to have good, fast, and cheap.  So, my suggestion is to pick two that are most important to pay on (these are non-negotiable expectations) and then incentivize the third.  Say, flat fee for a quality job, that is done on budget within 10 weeks (if he says 8, give a little buffer).  Then bonus him if he comes if he beats this.