Budgeting Masterclass Replay

• We create inaccurate budgets, resulting in lost profits
• We create budgets that we are not confident in, causing a lot of stress
• We take hours to create budgets, missing deals and wasting time
• We don’t have the tools or process, reducing our efficiency
• We aren’t familiar with construction costs, leaving us feeling lost

Our success in this business is highly dependent on how accurately and efficiently we create budgets

• Create budgets that are within 5-10% of the actual spend
• Create budgets within minutes, instead of hours
• Have a system & the tools needed for budgeting
• Stop penny-pinching your way to the finish line
• Stop purchasing deals that are not profitable
• Avoid using unnecessarily large contingency costs

1. Scope of Work - A detailed SOW with quantities, material, and other important specifications that we can use directly for budgeting. This is why creating your scope of work properly is so important.

2. Construction Costs Sheet - A master spreadsheet or other document that tracks all local construction costs in your market. 

3. Spreadsheets/Software - Documents used to budget, and ideally perform additional functions like estimating, tracking, reporting, templating, etc. 

4. Templates - Budgets templated from previous projects that speed up our budgeting and allow us to be more accurate. 

There are only two ways to blow a budget...

• Missing Line Items (90-95% of the time)
• Under-budgeting Line Items (much less common)

Our systems and processes need to be focused on avoiding these two. 

How do we budget a project before we know what we want to do on it?

It is unfair to hold yourself to a budget that has no relationship to the scope of work that is necessary on the project. 

An inaccurate SOW will always produce an inaccurate budget

We are going to use a SOW guide, and a SOW template to make sure we are not missing anything in our scope, therefore not missing anything in our budget

Our Scope of Work will be directly referenced when budgeting

This speeds up efficiency and accuracy within each line item

A guide with questions or notes which ensure that all potential scope of work are considered. For example, our Scope of Work guide for Demo is below...

DEMO

SCOPE OF WORK

Full demo OR Partial demo?

Plaster or drywall walls?

IF Partial demo, any specific rooms to demo complete? Kitchens/Bathrooms?  

List any important items to demo; chimneys, boilers, bathtubs, etc.

List important items not to demo; mantles, trim, etc.

Keep track of all invoices, receipts, and other expenses you have ever made on your projects.

Document all in a master spreadsheet that you can use in the future when estimating projects.

Note any vacancies in your spreadsheet, then do some research and call around for estimates.

Be aggressive! Do not wait for the time to make a budget to populate your Cost Sheet.

Now we can start with the vast majority of the necessary detail already populated in our budget, and our job is simply to audit the template to make sure it pertains to the project at hand.

• Add line items
• Subtract line items
• Edit the costs
• Edit the scope of work

This is like getting a HUGE head start to budgeting!

Without a template, you could be dealing with up to 50+ line items for each project, that you will need to recall off the top of your head. 

This is how we avoid MISSING

Your job it to template your 3-5 most common types of projects. For example, I have a cosmetic rehab, full-gut renovation, and new construction template.

This is how we are going to create, and document our budget.

The goal is to pick the method that will increase efficiency, clarity and accuracy.

Remember that your software/spreadsheet will have to go hand-in-hand. Whichever way you document your budget, will be the same way you create your templates. 

We will always recommend for using Software! Let's debunk some of the most common oppositions...

Most common oppositions to using software:

1. It costs more than spreadsheets

• How much is your time worth? Software can save you countless HOURS
• The cost for software is negligible compared to the cost to rehab and build
• You always get your ROI. Software helps us save money through insights, tracking, reporting, etc. 

2. It is rigid, I like to be able to fully customize my budget

• Getting too granular will slow us down. Focus on the most important things.
• Is it a fair trade off to be more customizable, but sacrifice efficiency?
• Don't let the perfect be the enemy of the good

We recommend Rehab Valuator, and we show specifically how this maximizes our efficiency. Use the link below for a 14 day trial for $1!

SIGN UP NOW

1. Create a budget for a new construction project
2. Create a budget for a full-gut renovation
3. Create a budget for a cosmetic rehab

USING OUR BUDGETING TOOLBELT

• Rehab Valuator Software
• Cost Estimates Sheet
• Scope of Work
• Templates

 & THE BEST PART, WE CREATE THESE BUDGETS WITHIN MINUTES, WITH HIGH ACCURACY.