House #36: Preliminary Budget

July 3, 2012 · 5 comments

We’ll be closing on The WI-1 House in the next few days. While you wouldn’t expect it by looking at the pictures (I’ll post them soon), this is going to be one of our largest rehabs to date. Between foundation repairs, finishing a basement, major electrical plumbing and a full cosmetic rehab, we expect the renovations to approach $75,000.

Here’s how I expect those costs to break down:

Preliminary Budget

We haven’t gotten many bids on this project yet, and I still don’t know exactly how much stuff costs in Milwaukee, so I could be off (either low or high) on these estimates. Hopefully if I’m off, it’s because I over-estimated instead of under-estimated!

5 responses to “House #36: Preliminary Budget”

  1. Jim Mackel says:

    J, Just getting started with your tremendous resource here. Thank you for sharing your expeirience and results. One thing I notice on your Cost breakdown is a contingency line item? Unforseens are a big part of construction and without exray glasses difficult to see these surprises. and a misc. Labor/cleaning labor line item or is this done by you?

    Thank you again and I look forward now to read your site.


  2. Dennis says:

    J Scott,

    It must be the holiday affecting me…are you lumping most of your material costs in with the labor for convenience ??? Many blanks on this sheet that I feel should have some values are lacking. Most projects usually have a ratio of material/labor that one can almost establish an algorithm for future projections.

    BTW~~~ I lived in Milwaukee for 30+ years. Keep in mind the weather gets brutal in the winter, so estimating turnaround time on your rehabs may need to have a buffer if much of the work is exterior. Even interior things like mudding, painting, etc can take extra time unless the heat is cranked on pretty high.

  3. J Scott says:

    Hi Jim,

    I don’t add contingency into the rehab budget. In my experience, if you add in extra cost, you’ll find a way to spend it, even if you don’t need to. I’d rather estimate low and have to fight to keep costs down than to estimate high and find myself adding stuff in unnecessarily.

    That said, generally speaking, if we run into any surprises that add cost, we will play around with the rest of the budget to save money in other places. While we occasionally go over budget, we’re either on-budget or under-budget about 80% of the time. If there’s no way to recapture any surprise costs, it just eats into our profit.

  4. J Scott says:

    Hi Dennis –

    For the most part, I never provide any building materials for my jobs — I have the contractors provide all building materials. This includes things like lumber, siding, paint, insulation, sheetrock, nails/screws/fasteners, concrete, etc. So, I expect those costs to be absorbed by the contractors into their bids and I don’t break them out separately on the spreadsheet.

    I do provide all finish materials — lights/fans, faucets/toilets/tubs, doors, appliances, carpet/vinyl flooring, etc. Those things are broken out as separate material costs on the spreadsheet.

    As for Milwaukee in the winter, we haven’t decided if we plan to do projects up there during that time of the year, or if we’ll only be working up there part-time… 🙂

  5. Mark in Fl says:

    Looking forward to the pictures.

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