By Mike Baird
So you’ve bitten the bullet and started flipping houses. You’ve made a few flips back to back, and now you’re starting to make overlapping deals, and you have more than one flip in progress at a time. You’re probably starting to feel a little bit spread out and a little bit stressed. You feel like you have to be in multiple places at once, and that’s adding to your stress. What can you do?
Feeling Overwhelmed? Don’t Back Off Now!
Some people will think, “It’s time to scale back; I can’t do all this on my own.” Others will think, “It’s time to hire an assistant and get more help on these projects.” At this point, both of these options have flaws. First of all, scaling back because your house flipping business is outgrowing your ability to multitask is a good way to shoot yourself in the foot. If every entrepreneur thought this way, you’d never see a startup grow to become a Fortune 500 corporation. People like Sir Richard Branson, Bill Gates, Steve Jobs, and Mark Zuckerberg would never have become millionaires, let alone billionaires.
Hiring the Right Kind of Help
So, obviously, scaling back isn’t the way to go, but hiring an assistant or intern might not be the right move right now, either. Why not hire help? Well, honestly, the question isn’t whether or not to hire more help but what kind of help you need.
If you have multiple flips under construction at the same time, you need someone who can take the load off of your shoulders and create order out of chaos. While a personal assistant can organize your office affairs and meetings, they’re not going to be much good to you on construction sites. And while interns are great for taking on smaller tasks that distract you from getting the bigger stuff done, you also have to hold their hands for a while. They’re great once they’ve learned a few things, but they can also be an added stressor when you first hire them.
The Benefits of Hiring a Project Manager
At this point, as your house flipping business is growing and you’re taking on more projects at once, you need someone who understands construction and can communicate well with contractors. You need someone who can help advise you on what you can do yourself and what you should leave to the professionals. In short, you need a project manager.
Not only can a project manager help keep your jobs organized and oversee progress, materials, and contractors, but you can also often work out how you’ll pay them in a more advantageous way than you can with a lot of general contractors.
Your payment agreement with your project manager could look like any of the following options:
- Flat rate – This is probably your best bet if your project manager is only overseeing a single rehab. If they’re going to be working with you on multiple projects, though, you may want to consider one of the following agreements.
- Flat rate and performance bonuses – You’ll pay a flat rate, but you’ll also pay agreed-upon bonuses for coming in under set budgets, beating deadlines, etc.
- Partnership – Create an equity stake in which your project manager basically gets paid a percentage of the profits on your properties when they sell. This is a more advanced approach, and it may not be the way to go early on. Once you get going and have worked with a project manager for a while, this could actually be advantageous to both of you.
House flipping is all about building relationships, and a good relationship with the right project manager could save you a lot of time, energy, money, and stress in your career flipping houses.