How are you estimating costs for renovations?

Property Manager · Raleigh, Raleigh-Durham area · Member since 2025 · 51 posts · 39 votes

Quick background — I run a fix-and-flip operation in the RDU Triangle (NC) and Huntsville, AL. Completed 7 flips last year with average rehab budgets around $110K per property.

One thing that kept burning me early on was inaccurate cost estimation. Not by a little — by 20-30% on some projects. The usual approach of getting 2-3 contractor bids and averaging them sounds reasonable until you realize most contractors are estimating based on gut feel too.

So I started building my own system. Tracked every invoice, every change order, every material receipt across all my projects. Broke it down by room, by trade, by market. A few things jumped out:

— Material costs between my two markets (Raleigh vs Huntsville) differ by 25-40% depending on the category. National average calculators are basically useless for deal analysis.

— Kitchens and bathrooms account for roughly 45-55% of total rehab spend on a typical flip, but they're the rooms where estimates are most likely to be wrong because of hidden plumbing and electrical work.

— Contingency budgets under 15% are a gamble. Across my 7 projects, the average unplanned cost was 12% of the original estimate.

All of that data completely changed how I underwrite deals now. I won't even make an offer unless I've broken the rehab down room by room with market-adjusted numbers. It takes more time upfront but it's saved me from at least two deals that looked good on paper but would've been losers.

What's your process? Are you relying on contractor bids? Using software? Running your own spreadsheets?

Would love to compare notes. Drop your approach below — especially if you're operating in secondary markets where data is harder to come by.

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Atoriz

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Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

7mo

Quote from @Warren Ifergane:

Great observations. The investors I see who estimate most accurately usually end up doing something similar to what you described — building their own cost database over time.

A couple patterns I’ve noticed across flips:

• Kitchen + bath surprises are almost always plumbing/electrical once walls are opened. That’s where estimates drift the most.
• Market differences are huge — labor especially. I’ve seen 20–30% swings between cities that are only a few hours apart.
• Most experienced flippers seem to land around 10–15% contingency once they’ve done enough projects to tighten their scope.

One thing that seems to help is breaking rehab into standardized scopes (paint, flooring, light cosmetic, full kitchen, full bath, etc.) and assigning rough ranges based on previous projects rather than starting from scratch each time.

Curious — have you found certain trades consistently underbid upfront and grow during the project? Electrical and plumbing seem to be the usual ones.

"Curious — have you found certain trades consistently underbid upfront and grow during the project? Electrical and plumbing seem to be the usual ones."

Having done remodels for decades, the answer is no. However this always involved Sub-Contractors that I used on job after job for years.....you have to treat your Subs really well and they will keep their bids tighter and eat the small oooops that pop up on every project....

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Richard F.
Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
7mo
If you are familiar with construction, and the terminology, I was very satisfied using the estimating manuals from Hometech. Now they also have an online estimating site as well, although I have not utilized it. Their subscription service updates your pricing a couple times per year, by zip code. You can create takeoff lists for your "standard" common sized bathrooms, kitchens, etc. one time, then just adjust the quantity/dimensional info up/down for the next similar project.
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- Alexis DeAngelisBusiness Member
  OP
  Property Manager · Raleigh, Raleigh-Durham area · Member since 2025 · 51 posts · 39 votes
  7mo
  Quote from @Richard F.:
  
  If you are familiar with construction, and the terminology, I was very satisfied using the estimating manuals from Hometech. Now they also have an online estimating site as well, although I have not utilized it. Their subscription service updates your pricing a couple times per year, by zip code. You can create takeoff lists for your "standard" common sized bathrooms, kitchens, etc. one time, then just adjust the quantity/dimensional info up/down for the next similar project.
  
  Thank you so much for this! I will check them out
  [email protected]
  Atoriz
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Kunal DattPro Member
Raleigh, NC · Member since 2020 · 30 posts · 25 votes
7mo
I’ve heard good things about FlipperForce though I have not used the software in practice
1 Reply
- Alexis DeAngelisBusiness Member
  OP
  Property Manager · Raleigh, Raleigh-Durham area · Member since 2025 · 51 posts · 39 votes
  7mo
  Quote from @Kunal Datt:
  
  I’ve heard good things about FlipperForce though I have not used the software in practice
  
  I looked at Flipperforce, but I wasn't too impressed especially with their pricing
  [email protected]
  Atoriz
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Bo SmithPro Member
Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
7mo
Alexis, your approach of tracking everything by room and market is exactly right. That level of data is the difference between making money and guessing. Most operators are one spreadsheet away from being dangerous with their underwriting.
I've done something similar and came to the same conclusion about kitchens and baths being 45-55% of budget. But I'd push one level deeper -- track your subs' accuracy. Some contractors are consistently 10-15% over budget, others consistently 10% under. Once you know which subs those are, it changes your contingency math. If your framers are usually spot-on but your electricians are always high, you don't need 15% across the board -- you can dial it back on framing and heavy on electrical.
The contingency point hits hard. A 12% average on unplanned costs means most deals got hit. I learned the hard way that under 15% is a bet, not a plan. But if you're tracking by market and room like you're doing, your historical data becomes predictive -- and you can get tighter on contingency for deals that fit your historical profile.
When you're analyzing secondary markets with less comp data, are you doing physical walkthroughs early to validate contractor estimates, or are you working purely off photos and specs at first?
1 Reply
- Alexis DeAngelisBusiness Member
  OP
  Property Manager · Raleigh, Raleigh-Durham area · Member since 2025 · 51 posts · 39 votes
  7mo
  Quote from @Bo Smith:
  
  Alexis, your approach of tracking everything by room and market is exactly right. That level of data is the difference between making money and guessing. Most operators are one spreadsheet away from being dangerous with their underwriting.
  I've done something similar and came to the same conclusion about kitchens and baths being 45-55% of budget. But I'd push one level deeper -- track your subs' accuracy. Some contractors are consistently 10-15% over budget, others consistently 10% under. Once you know which subs those are, it changes your contingency math. If your framers are usually spot-on but your electricians are always high, you don't need 15% across the board -- you can dial it back on framing and heavy on electrical.
  The contingency point hits hard. A 12% average on unplanned costs means most deals got hit. I learned the hard way that under 15% is a bet, not a plan. But if you're tracking by market and room like you're doing, your historical data becomes predictive -- and you can get tighter on contingency for deals that fit your historical profile.
  When you're analyzing secondary markets with less comp data, are you doing physical walkthroughs early to validate contractor estimates, or are you working purely off photos and specs at first?
  
  We are doing a lot of virtual walk throughs and photos. A few of our homes are in another state, so gauging renos from a distance can be a little challenging :-)
  [email protected]
  Atoriz
  Website View Page
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- Marcus Auerbach
  Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
  7mo
  Quote from @Alexis DeAngelis:
  
  Quote from @Bo Smith:
  
  Alexis, your approach of tracking everything by room and market is exactly right. That level of data is the difference between making money and guessing. Most operators are one spreadsheet away from being dangerous with their underwriting.
  I've done something similar and came to the same conclusion about kitchens and baths being 45-55% of budget. But I'd push one level deeper -- track your subs' accuracy. Some contractors are consistently 10-15% over budget, others consistently 10% under. Once you know which subs those are, it changes your contingency math. If your framers are usually spot-on but your electricians are always high, you don't need 15% across the board -- you can dial it back on framing and heavy on electrical.
  The contingency point hits hard. A 12% average on unplanned costs means most deals got hit. I learned the hard way that under 15% is a bet, not a plan. But if you're tracking by market and room like you're doing, your historical data becomes predictive -- and you can get tighter on contingency for deals that fit your historical profile.
  When you're analyzing secondary markets with less comp data, are you doing physical walkthroughs early to validate contractor estimates, or are you working purely off photos and specs at first?
  
  We are doing a lot of virtual walk throughs and photos. A few of our homes are in another state, so gauging renos from a distance can be a little challenging :-)
  
  OMG, that's your problem right there! Why on earth would you flip remote? It makes everything harder, even the little things and contractors have more opportunities to screw up, slack off or charge a little more. That's probably a 20% premium right there. If I am not on a job at least every other day...
  2 Reply
- Alexis DeAngelisBusiness Member
  OP
  Property Manager · Raleigh, Raleigh-Durham area · Member since 2025 · 51 posts · 39 votes
  7mo
  Quote from @Marcus Auerbach:
  
  Quote from @Alexis DeAngelis:
  
  Quote from @Bo Smith:
  
  Alexis, your approach of tracking everything by room and market is exactly right. That level of data is the difference between making money and guessing. Most operators are one spreadsheet away from being dangerous with their underwriting.
  I've done something similar and came to the same conclusion about kitchens and baths being 45-55% of budget. But I'd push one level deeper -- track your subs' accuracy. Some contractors are consistently 10-15% over budget, others consistently 10% under. Once you know which subs those are, it changes your contingency math. If your framers are usually spot-on but your electricians are always high, you don't need 15% across the board -- you can dial it back on framing and heavy on electrical.
  The contingency point hits hard. A 12% average on unplanned costs means most deals got hit. I learned the hard way that under 15% is a bet, not a plan. But if you're tracking by market and room like you're doing, your historical data becomes predictive -- and you can get tighter on contingency for deals that fit your historical profile.
  When you're analyzing secondary markets with less comp data, are you doing physical walkthroughs early to validate contractor estimates, or are you working purely off photos and specs at first?
  
  We are doing a lot of virtual walk throughs and photos. A few of our homes are in another state, so gauging renos from a distance can be a little challenging :-)
  
  OMG, that's your problem right there! Why on earth would you flip remote? It makes everything harder, even the little things and contractors have more opportunities to screw up, slack off or charge a little more. That's probably a 20% premium right there. If I am not on a job at least every other day...
  
  We essentially flip virtually, but my brother is in Alabama running the crews and renos so luckily we are familiar with the area. I personally am in NC, trying to ramp up more flips here also.
  [email protected]
  Atoriz
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Cade Stone
Investor · Springfield · Member since 2026 · 3 posts · 2 votes
7mo
Contractor bids alone will get you killed, learned that early.What actually changed things for me was tracking every invoice across my own deals broken out by trade and scope item. After enough projects you stop guessing and start knowing what things cost in your market. A national average number is almost useless, your local labor rates and material costs are what matter.The contingency thing you mentioned is real. I default to 15% now and I have never once been mad I had it. The deals where I tried to run tighter than that are the ones I remember for the wrong reasons.One thing I'd add to what Bo said about tracking your subs' accuracy: it also tells you which subs are sandbagging bids to protect themselves and which ones are actually sharp. Over time you figure out whose number to trust and whose to add 20% to before you believe it.That data becomes your real estimating tool, not the bid itself.
1 Reply
- Alexis DeAngelisBusiness Member
  OP
  Property Manager · Raleigh, Raleigh-Durham area · Member since 2025 · 51 posts · 39 votes
  7mo
  Quote from @Cade Stone:
  
  Contractor bids alone will get you killed, learned that early.What actually changed things for me was tracking every invoice across my own deals broken out by trade and scope item. After enough projects you stop guessing and start knowing what things cost in your market. A national average number is almost useless, your local labor rates and material costs are what matter.The contingency thing you mentioned is real. I default to 15% now and I have never once been mad I had it. The deals where I tried to run tighter than that are the ones I remember for the wrong reasons.One thing I'd add to what Bo said about tracking your subs' accuracy: it also tells you which subs are sandbagging bids to protect themselves and which ones are actually sharp. Over time you figure out whose number to trust and whose to add 20% to before you believe it.That data becomes your real estimating tool, not the bid itself.
  
  Luckily, with the property management experience I have in multi family, finding good subs locally in NC isn't hard for me, but finding trustworthy ones in other locations seems to be my challenge. Pricing in NC for certain projects can be extremely different than pricing in Alabama. Work quality is also a huge factor for us considering timelines and budgeting.
  [email protected]
  Atoriz
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  0 Reply
Alan F.
Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
7mo
Quote from @Alexis DeAngelis:

Quick background — I run a fix-and-flip operation in the RDU Triangle (NC) and Huntsville, AL. Completed 7 flips last year with average rehab budgets around $110K per property.

One thing that kept burning me early on was inaccurate cost estimation. Not by a little — by 20-30% on some projects. The usual approach of getting 2-3 contractor bids and averaging them sounds reasonable until you realize most contractors are estimating based on gut feel too.

So I started building my own system. Tracked every invoice, every change order, every material receipt across all my projects. Broke it down by room, by trade, by market. A few things jumped out:

— Material costs between my two markets (Raleigh vs Huntsville) differ by 25-40% depending on the category. National average calculators are basically useless for deal analysis.

— Kitchens and bathrooms account for roughly 45-55% of total rehab spend on a typical flip, but they're the rooms where estimates are most likely to be wrong because of hidden plumbing and electrical work.

— Contingency budgets under 15% are a gamble. Across my 7 projects, the average unplanned cost was 12% of the original estimate.

All of that data completely changed how I underwrite deals now. I won't even make an offer unless I've broken the rehab down room by room with market-adjusted numbers. It takes more time upfront but it's saved me from at least two deals that looked good on paper but would've been losers.

What's your process? Are you relying on contractor bids? Using software? Running your own spreadsheets?

Would love to compare notes. Drop your approach below — especially if you're operating in secondary markets where data is harder to come by.

I learned to estimate old school, books from craftsman, rs means etc. Calculate labor units x labor rates, add materials take offs = $. If you search "how to estimate residential remodeling" there's lots of great resources.
There's also some great software like accubid, procore etc.
1 Reply
Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
7mo
@Alexis DeAngelis That's an impressive 2025! I'm selling a house we flipped last year and I put myself through flipping boot camp. We have mostly done BRRRR deals. It was a profitable education but my time value of money was not justified in the experience.

How did you go from PM experience in multi-family to 7 deals in a year?
0 Reply
- Alexis DeAngelisBusiness Member
  OP
  Property Manager · Raleigh, Raleigh-Durham area · Member since 2025 · 51 posts · 39 votes
  7mo
  Quote from @Jaron Walling:
  
  @Alexis DeAngelis That's an impressive 2025! I'm selling a house we flipped last year and I put myself through flipping boot camp. We have mostly done BRRRR deals. It was a profitable education but my time value of money was not justified in the experience.
  
  How did you go from PM experience in multi-family to 7 deals in a year?
  To be honest, I got pulled in every direction in multi-family and it was exhausting. I left in May 2025 and started helping my family with our renovation company. It allowed me to focus on our family company, and not be as stressed all the time from multi-family. It was a hard transition at first, but I'm really grateful to get into BiggerPockets and pick peoples brains for more ideas on flipping and STR. We have a NC and AL division, and the NC division is currently focused on software development. We have quite the interesting story LOL
  [email protected]
  Atoriz
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Lipa F.
Investor · Member since 2024 · 79 posts · 32 votes
7mo
You need to make sure your numbers are accurate and realistic. If you estimate a kitchen at $15,000 and it ends up costing $17,000, that’s already $2,000 over. If you budget a bathroom at $10,000 and it comes in at $12,000, that’s another $2,000. If you think painting will be $6,000 and it ends up costing $8,000, that’s another $2,000.
Now you’re $6,000 over budget — and that’s just from being off by a few thousand dollars on each item. Small underestimations add up fast and can seriously eat into your profit.
1 Reply
- Jaron WallingPro Member
  Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
  7mo
  Quote from @Lipa F.:
  
  You need to make sure your numbers are accurate and realistic. If you estimate a kitchen at $15,000 and it ends up costing $17,000, that’s already $2,000 over. If you budget a bathroom at $10,000 and it comes in at $12,000, that’s another $2,000. If you think painting will be $6,000 and it ends up costing $8,000, that’s another $2,000.
  Now you’re $6,000 over budget — and that’s just from being off by a few thousand dollars on each item. Small underestimations add up fast and can seriously eat into your profit.
  
  OR you could missed a damaged AC unit (wasn't cooling at all) and be out $6k on 1 item like we recently did :-) hahaha
  1 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
7mo
This is an age-old problem and will probably always be. One thing I can tell you is this: any estimating programs you find online are just gonna get you close, you will rarely get a real tight number. Why? Because they can't see through walls or drill holes and look inside, or crawl in the attic or the crawlspace. Or especially, have those decades of experience, hunches and gut feelings that will save you more often than not. The estimating programs are ok for a single task like.....how much is a 20ft x 10 ft deck? But not a whole house remodel, too many moving parts!

Ultimately you need a veteran General Contractor and/or Home Inspector. Ones that you trust...you will have to pay for these folks but not that much, maybe $600 per job.

I know that you want a firm price before you make an offer and get into escrow, but that just ain't gonna happen. For now, find a really experienced GC who will run through the house and give you a good number...with allowance and contingency items of course. Then add 20% for 'ooooops' and see if the deal still works....

@Alan F. has the 'old-school' approach which is good too... haven't heard of RS Means in decades, Lol....

Most investors will never get to the point where they can be as accurate as you need to be. You just have to do it every day for decades to get this right. It is almost a magical gift that some people have.....
1 Reply
- Alan F.
  Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
  7mo
  Quote from @Bruce Woodruff:
  
  This is an age-old problem and will probably always be. One thing I can tell you is this: any estimating programs you find online are just gonna get you close, you will rarely get a real tight number. Why? Because they can't see through walls or drill holes and look inside, or crawl in the attic or the crawlspace. Or especially, have those decades of experience, hunches and gut feelings that will save you more often than not. The estimating programs are ok for a single task like.....how much is a 20ft x 10 ft deck? But not a whole house remodel, too many moving parts!
  
  Ultimately you need a veteran General Contractor and/or Home Inspector. Ones that you trust...you will have to pay for these folks but not that much, maybe $600 per job.
  
  I know that you want a firm price before you make an offer and get into escrow, but that just ain't gonna happen. For now, find a really experienced GC who will run through the house and give you a good number...with allowance and contingency items of course. Then add 20% for 'ooooops' and see if the deal still works....
  
  @Alan F. has the 'old-school' approach which is good too... haven't heard of RS Means in decades, Lol....
  
  Most investors will never get to the point where they can be as accurate as you need to be. You just have to do it every day for decades to get this right. It is almost a magical gift that some people have.....
  
  Lol, im so old school that i carry all the books in my truck (code books too) I still have my drafting table too!
  1 Reply
- Bruce WoodruffPro Member
  Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
  7mo
  Quote from @Alan F.:
  
  Quote from @Bruce Woodruff:
  
  This is an age-old problem and will probably always be. One thing I can tell you is this: any estimating programs you find online are just gonna get you close, you will rarely get a real tight number. Why? Because they can't see through walls or drill holes and look inside, or crawl in the attic or the crawlspace. Or especially, have those decades of experience, hunches and gut feelings that will save you more often than not. The estimating programs are ok for a single task like.....how much is a 20ft x 10 ft deck? But not a whole house remodel, too many moving parts!
  
  Ultimately you need a veteran General Contractor and/or Home Inspector. Ones that you trust...you will have to pay for these folks but not that much, maybe $600 per job.
  
  I know that you want a firm price before you make an offer and get into escrow, but that just ain't gonna happen. For now, find a really experienced GC who will run through the house and give you a good number...with allowance and contingency items of course. Then add 20% for 'ooooops' and see if the deal still works....
  
  @Alan F. has the 'old-school' approach which is good too... haven't heard of RS Means in decades, Lol....
  
  Most investors will never get to the point where they can be as accurate as you need to be. You just have to do it every day for decades to get this right. It is almost a magical gift that some people have.....
  
  Lol, im so old school that i carry all the books in my truck (code books too) I still have my drafting table too!
  
  You probably still write down your numbers and thoughts in a notebook too ? :-)
  2 Reply
- Alexis DeAngelisBusiness Member
  OP
  Property Manager · Raleigh, Raleigh-Durham area · Member since 2025 · 51 posts · 39 votes
  7mo
  Quote from @Alan F.:
  
  Quote from @Bruce Woodruff:
  
  This is an age-old problem and will probably always be. One thing I can tell you is this: any estimating programs you find online are just gonna get you close, you will rarely get a real tight number. Why? Because they can't see through walls or drill holes and look inside, or crawl in the attic or the crawlspace. Or especially, have those decades of experience, hunches and gut feelings that will save you more often than not. The estimating programs are ok for a single task like.....how much is a 20ft x 10 ft deck? But not a whole house remodel, too many moving parts!
  
  Ultimately you need a veteran General Contractor and/or Home Inspector. Ones that you trust...you will have to pay for these folks but not that much, maybe $600 per job.
  
  I know that you want a firm price before you make an offer and get into escrow, but that just ain't gonna happen. For now, find a really experienced GC who will run through the house and give you a good number...with allowance and contingency items of course. Then add 20% for 'ooooops' and see if the deal still works....
  
  @Alan F. has the 'old-school' approach which is good too... haven't heard of RS Means in decades, Lol....
  
  Most investors will never get to the point where they can be as accurate as you need to be. You just have to do it every day for decades to get this right. It is almost a magical gift that some people have.....
  
  Lol, im so old school that i carry all the books in my truck (code books too) I still have my drafting table too!
  
  I love this! I'm definetly a paper and pen person so i totally understand!
  [email protected]
  Atoriz
  Website View Page
  1 Reply
Jonathan KlemmBusiness Member
Moderator
Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
7mo
Love your post @Alexis DeAngelis! You COMPLETELY NAILED IT! Most contractors have NO IDEA what their cost are and are not tracking them to learn.

Are you doing behind-the-wall mechanical, electrical, and plumbing on your renovations, getting permits, and using licensed subcontractors? Just curious because that completely changes the game here in Chicago, and most investors here dont account for those hidden soft cost and time.

We start with a project range because nothing will ever be perefect and we want to make sure the client has a buget that can fit into our range. THEN we create a detailed scope of work/project summary, followed by a material quantity take-off, then input into our software that we have to adjust for every project based on the size, then an internal bid review meeting, and then finally we share that with the client. We break all our cost down by line items and put them into a data base of past projects. It works really really well if you do the same project over and over again, but as you know every project is different and when you are working for clients EVERY SINGLE client is different as well - being an investor is easier in that sense.

We screwed up earlier on because our numbers were too low and didnt know what we didnt know until it came up....after 5 years of doing renovations for other people we've built some really cool systems and have a 10X better handle on cost and schedule.

We use buildertrend as our project management software and track our past project data with google sheets.
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Ira Berman
Member since 2026 · 4 posts · 1 vote
7mo
I learned from @ wholesaling book about estimating the repair costs as follows Multiply the SQ of the home by $15 for a light rehab .. multiply the SQ by $30 for a moderate rehab... then finally .. for a Heavy rehab multiply the SQ by $50.. hope that helps & happy investing
0 Reply
- Andy Patel
  Charlotte, NC · Member since 2026 · 4 posts · 0 votes
  5mo
  Quote from @Ira Berman:
  
  I learned from @ wholesaling book about estimating the repair costs as follows Multiply the SQ of the home by $15 for a light rehab .. multiply the SQ by $30 for a moderate rehab... then finally .. for a Heavy rehab multiply the SQ by $50.. hope that helps & happy investing
  
  How do you define light, moderate, and heavy? Can you provide examples of the scope of each? Thanks!
  
  0 Reply
- Ira Berman
  Member since 2026 · 4 posts · 1 vote
  4mo
  @Andy Patel light rehab- cosmetic work .. paint ... carpet etc
  
  moderate- a little mix of everything but not yet a full gut rehab
  
  Heavy- A full gut rehab where everything needs to be replaced ..
  
  sorry, I might not have yet provided the best example but I'm still learning right now as a new wholesaler to the market in Baltimore MD.
  0 Reply
Michael Wyatt
Lender · Boston, MA · Member since 2021 · 125 posts · 64 votes
7mo
I think you've done enough in each market now to have a good grasp on material cost. You've got to bid your own projects, and not just estimate but truly quote it line by line. There is some software out there but for me the budget templates similar to those you fill out for loans gets the job done.
0 Reply
Jonathan KlemmBusiness Member
Moderator
Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
7mo
@Ira Berman - The SF method will maybe get you within 30%, 50% of the time I'd only be using something like that for back-of-the-napkin deal analysis. At least here in Chicago, all the buildings are so much more unique and require an indepth walkthrough and even then...you are likely to miss things...

Of course hindsight is 20/20
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Ira Berman
Member since 2026 · 4 posts · 1 vote
7mo
Very true ... I will take that into consideration in my journey.
1 Reply
Ofek Tal
Member since 2024 · 8 posts · 4 votes
7mo
Really interesting breakdown. We've seen something very similar with our flips as well, especially the kitchen and bathroom costs being where most of the surprises happen.

What made the biggest difference for us was moving away from high-level estimates and instead building very detailed scopes of work where contractors price each line item. It made tracking budgets and comparing bids much easier across projects.

After dealing with spreadsheets and scattered contractor communication for a while we ended up building a system internally to manage all of that in one place.

Happy to share it if anyone here is curious.
0 Reply
- Bruce WoodruffPro Member
  Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
  7mo
  Quote from @Ofek Tal:
  
  Really interesting breakdown. We've seen something very similar with our flips as well, especially the kitchen and bathroom costs being where most of the surprises happen.
  
  What made the biggest difference for us was moving away from high-level estimates and instead building very detailed scopes of work where contractors price each line item. It made tracking budgets and comparing bids much easier across projects.
  
  After dealing with spreadsheets and scattered contractor communication for a while we ended up building a system internally to manage all of that in one place.
  
  Happy to share it if anyone here is curious.
  
  Although a lot of good Contractors will not price line items. They can't make enough profit to pay their crews and realize a decent ROI...
  1 Reply
Warren Ifergane
Lender · Miami, FL · Member since 2024 · 37 posts · 15 votes
7mo
Great observations. The investors I see who estimate most accurately usually end up doing something similar to what you described — building their own cost database over time.

A couple patterns I’ve noticed across flips:

• Kitchen + bath surprises are almost always plumbing/electrical once walls are opened. That’s where estimates drift the most.
• Market differences are huge — labor especially. I’ve seen 20–30% swings between cities that are only a few hours apart.
• Most experienced flippers seem to land around 10–15% contingency once they’ve done enough projects to tighten their scope.

One thing that seems to help is breaking rehab into standardized scopes (paint, flooring, light cosmetic, full kitchen, full bath, etc.) and assigning rough ranges based on previous projects rather than starting from scratch each time.

Curious — have you found certain trades consistently underbid upfront and grow during the project? Electrical and plumbing seem to be the usual ones.
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- Bruce WoodruffPro Member
  Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
  7mo
  Quote from @Warren Ifergane:
  
  Great observations. The investors I see who estimate most accurately usually end up doing something similar to what you described — building their own cost database over time.
  
  A couple patterns I’ve noticed across flips:
  
  • Kitchen + bath surprises are almost always plumbing/electrical once walls are opened. That’s where estimates drift the most.
  • Market differences are huge — labor especially. I’ve seen 20–30% swings between cities that are only a few hours apart.
  • Most experienced flippers seem to land around 10–15% contingency once they’ve done enough projects to tighten their scope.
  
  One thing that seems to help is breaking rehab into standardized scopes (paint, flooring, light cosmetic, full kitchen, full bath, etc.) and assigning rough ranges based on previous projects rather than starting from scratch each time.
  
  Curious — have you found certain trades consistently underbid upfront and grow during the project? Electrical and plumbing seem to be the usual ones.
  "Curious — have you found certain trades consistently underbid upfront and grow during the project? Electrical and plumbing seem to be the usual ones."
  
  Having done remodels for decades, the answer is no. However this always involved Sub-Contractors that I used on job after job for years.....you have to treat your Subs really well and they will keep their bids tighter and eat the small oooops that pop up on every project....
  3 Reply
Richard Golding
Contractor · NYC/Los Angeles · Member since 2019 · 91 posts · 55 votes
5mo
I see this post is fairly old. But I posted something today that helps you and others in this exact situation. Trying to eliminate guessing games and provide numbers that are more in line with your area.
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Frantz JosephPro Member
Rental Property Investor · GA · Member since 2017 · 62 posts · 44 votes
5mo
@Lipa F.
I’m in a pickle, I bought a cash flowing rental I was going to upgrade and change the tenant pool. One of the tenants caused a fire in Kennox the units now I have to do a full gut on the entire 4 plex and all the work has to be permitted and pass inspections. If I walk away now I make 120% profit by just selling the property for almost scrap. I’ve been in the business for a while, I am an out of state investor, I don’t know if I’m going to lose my shirt if I try to do this deal
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Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
5mo
Quote from @Alexis DeAngelis:

Quick background — I run a fix-and-flip operation in the RDU Triangle (NC) and Huntsville, AL. Completed 7 flips last year with average rehab budgets around $110K per property.

One thing that kept burning me early on was inaccurate cost estimation. Not by a little — by 20-30% on some projects. The usual approach of getting 2-3 contractor bids and averaging them sounds reasonable until you realize most contractors are estimating based on gut feel too.

So I started building my own system. Tracked every invoice, every change order, every material receipt across all my projects. Broke it down by room, by trade, by market. A few things jumped out:

— Material costs between my two markets (Raleigh vs Huntsville) differ by 25-40% depending on the category. National average calculators are basically useless for deal analysis.

— Kitchens and bathrooms account for roughly 45-55% of total rehab spend on a typical flip, but they're the rooms where estimates are most likely to be wrong because of hidden plumbing and electrical work.

— Contingency budgets under 15% are a gamble. Across my 7 projects, the average unplanned cost was 12% of the original estimate.

All of that data completely changed how I underwrite deals now. I won't even make an offer unless I've broken the rehab down room by room with market-adjusted numbers. It takes more time upfront but it's saved me from at least two deals that looked good on paper but would've been losers.

What's your process? Are you relying on contractor bids? Using software? Running your own spreadsheets?

Would love to compare notes. Drop your approach below — especially if you're operating in secondary markets where data is harder to come by.
Alexis, this is actually a really solid breakdown and I’m right there with you on the “national averages are useless” point—once you’ve done a few projects you realize every market, and even every pocket within a market, behaves differently and labor swings way more than people expect. In my experience, the most reliable approach ends up being a hybrid: I still get contractor input, but I don’t treat it as the truth, more like a range check against my own historical data. The real shift happens when you start underwriting from your own comps and past jobs first, then sanity-checking with bids instead of the other way around, because like you said, contractor numbers can be just as soft as investor assumptions. I also think your point about kitchens and baths being the biggest variance drivers is spot on, especially because that’s where hidden issues like plumbing reroutes, subfloor damage, or outdated wiring tend to show up and blow up timelines and budgets. The only thing I’d add is that the longer I’ve done this, the more I’ve leaned into building a consistent “per-sqft by scope” baseline from my own completed projects and then layering a higher contingency depending on how much unknown condition risk I’m walking into, especially on older homes or anything I can’t fully inspect pre-close. The investors I see doing well long term aren’t necessarily the ones with perfect estimates, but the ones who consistently underwrite conservatively, track every variance like you’re doing, and then adjust their baseline assumptions every few deals instead of relying on static calculators or generic rules.
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Richard Golding
Contractor · NYC/Los Angeles · Member since 2019 · 91 posts · 55 votes
5mo
Piggybacking from my last post. I like using three passes instead of pretending one estimate is enough. First pass is a fast go/no-go number based on obvious scope and local unit ranges. That tells you whether the deal is even worth more time. Second pass is a room-by-room and trade-by-trade scope after walking the property. Third pass is contractor/sub input before final offer or during due diligence.

For the second pass, I break it into exterior, roof, windows/doors, foundation/structure, HVAC, electrical, plumbing, kitchen, baths, flooring, drywall/paint, trim/doors, landscaping, cleanup, permits, and contingency. Then I mark each line as cosmetic, functional, required, or optional. That keeps me from mixing “nice to have” upgrades with work the house actually needs.

The biggest mistake is using one blanket $/sf number. It can work for a quick filter, but it hides the expensive stuff: sewer, panel, HVAC, roof, foundation, water damage, mold, layout changes, and permit/code issues.

After each project, compare estimated vs. actual by trade. That feedback loop is where your numbers get good. Contractor quotes help, but your own historical database is what eventually lets you underwrite faster and with more confidence.
1 Reply
- Bruce WoodruffPro Member
  Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
  5mo
  Quote from @Richard Golding:
  
  Piggybacking from my last post. I like using three passes instead of pretending one estimate is enough. First pass is a fast go/no-go number based on obvious scope and local unit ranges. That tells you whether the deal is even worth more time. Second pass is a room-by-room and trade-by-trade scope after walking the property. Third pass is contractor/sub input before final offer or during due diligence.
  
  For the second pass, I break it into exterior, roof, windows/doors, foundation/structure, HVAC, electrical, plumbing, kitchen, baths, flooring, drywall/paint, trim/doors, landscaping, cleanup, permits, and contingency. Then I mark each line as cosmetic, functional, required, or optional. That keeps me from mixing “nice to have” upgrades with work the house actually needs.
  
  The biggest mistake is using one blanket $/sf number. It can work for a quick filter, but it hides the expensive stuff: sewer, panel, HVAC, roof, foundation, water damage, mold, layout changes, and permit/code issues.
  
  After each project, compare estimated vs. actual by trade. That feedback loop is where your numbers get good. Contractor quotes help, but your own historical database is what eventually lets you underwrite faster and with more confidence.
  "After each project, compare estimated vs. actual by trade. That feedback loop is where your numbers get good."
  
  This ^^^
  
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