If you have experience of buying a doer-upper and flipping it on for a profit, you may be wondering about the next step up: taking on a small-scale development where a commercial building is converted into residential. And it may seem that conversion projects will be more difficult and stressful than a refurb or flip—after all, they generate much bigger profits, so surely they must be more challenging—but that’s not been my experience. I’ve been in development for forty-odd years, and for my money, conversions are much easier, and that’s mainly because you can afford to hire better people to do more of the work that you might otherwise have done yourself. The budget for a flip might be several tens of thousands. However, a small conversion project is likely to run to a few hundred thousand pounds. And the most important thing this larger budget allows you to do is hire a Project Manager.
Many new developers consider managing their own projects, presumably to save money or perhaps because they think they will enjoy it. I would strongly advise against it. With a refurb or flip, you’ve little choice but to adopt a DIY approach since your budget won’t stretch to hiring a project manager. But with a conversion project, the budget is available, and having a good project manager on board will completely transform your experience as a developer.
Here are my top five tips for bagging yourself a peachy Project Manager:
Construction project management is a defined role in the construction industry, and there are many to be found working up and down the country. If you can, the best way of finding a good one is through word-of-mouth recommendations. Speak to other professionals such as architects and contractors to see if you hear any common names, and then go and interview them personally. Of course, you can always start with an online search to come up with a few names if you’re just starting out, but when you meet them, be sure to ask for references from their previous and existing developer clients.
2. Good relationship
Your project manager doesn’t have to be your best friend for life, but you must be able to get along. They are your eyes and ears on the ground, and they will almost certainly pay for themselves through the tighter controls that they’ll bring to your scheme. They’ll raise any issues with you and will be able to guide you based on their experience. In short, they will be the most valuable member of your team, so it makes sense to appoint someone with whom you can get along. If you’re speaking to a larger practice with several Project Managers on their team, make sure you have met in person the individual that would be appointed to your project.
3. Appropriate experience
As development projects come in a wide range of shapes and sizes, from large new-build housing projects to small-scale conversion schemes, make sure that your project manager has experience doing the sort of project you’re looking to do. Ask them about similar projects they’ve done and see if you can speak to their clients to get some direct feedback, both good and bad. Conversion projects are different from new builds, so make sure they have the right track record.
4. Avoid a clique
Recommendations can work both ways, and there’s no harm in asking your project manager for other professionals they recommend. After all, your interests are going to be aligned. You don’t want any lazy, inept, or unreliable people on board, and your Project Manager certainly won’t either. However, just be careful about creating a clique. If the Project Manager and the contractor are bosom buddies, you need to be confident that the former will call out the latter if they do something wrong. You won’t want any mistakes brushed under the carpet or, worse still, marked up as ‘sundry items’ and appearing on your bill.
5. Go local
You ideally want to find a project manager who lives within striking distance of your project. There are several benefits to this. The first is a practical one: they’ll need to go to the site several times a month, and so it will cost you more if they have to travel long distances to get there. Also, it can often pay dividends for the Project Manager to have local connections. There’s a fair chance they’ll have worked with some of the other professionals on your team before, plus they’ll know other local professionals and contacts that can be called on if needed.
By Ritchie Clapson CEng MIStructE, co-founder of propertyCEO – a nationwide property development and training company that helps people create a successful property development business in their spare time.