Most investors who lose money on a flip don't lose it because they picked the wrong neighborhood or misjudged the ARV. They lose it because they built the rehab budget wrong. Either they missed a line item entirely, or they used numbers from two years ago that don't reflect what labor actually costs today.

I walked through a live rehab scope with a coaching group last week on a distressed single-family in New Hampshire. A 960-square-foot ranch, listed at $189,000, assessed at $260,000. Good bones — new mechanical systems installed in 2024, public water, sewer, and natural gas. Significant deferred maintenance: pipes burst over winter, water damage, full plumbing replacement needed, new roof, no garage, heavy tree coverage.

We built the budget line by line. Here's exactly how I do it — and the specific numbers we landed on.

Start With the Non-Negotiables

Every flip has a set of costs you cannot avoid once you've committed to the scope. On this property, those were:

Roof replacement: On a property this size in NH, a new roof runs approximately $10,000. That's not negotiable — the property needs one, and buyers will flag it on inspection if you try to leave it.

Full plumbing replacement: Pipes burst means you're replacing the system. In today's NH market, fixtures and all, budget $20,000. I've seen investors try to spot-repair this. It costs more in the long run and creates liability.

New kitchen: A basic but functional kitchen replacement — new cabinets, counters, appliances — runs approximately $10,000 on a property this size. Not a designer kitchen. A clean, updated kitchen that passes the buyer sniff test.

New bathroom: $8,000 for a full bath refresh. New tile, vanity, fixtures. Budget this regardless of current condition — if everything else is updated and the bath looks original, it will hold back your ARV.

These four items alone account for roughly $48,000 of the scope. Everything else is built on top of this base.

The Middle-Cost Items Most Investors Underestimate

Once the non-negotiables are covered, the budget typically goes off the rails in three areas:

Plumbing fixtures and rough-in: I include this separately from the full plumbing line — rough-in for a new bathroom in the basement, if you're adding one, has its own cost. Budget it independently.

Flooring: LVP is running approximately $3 per square foot installed in most NH markets right now. On a 1,000-square-foot property, that's $3,000. Carpet is cheaper but often not appropriate for the resale spec you're targeting. Budget the LVP unless you have a specific reason not to.

Landscaping and exterior: This is where I see the most under-budgeting. I walked this property on Google Street View before running a single number. The comps — properties that sold at $385,000 to $400,000 in the same neighborhood — had cleared lots and manicured curb appeal. This property had heavy tree coverage and an overgrown lot.

Tree removal runs $10,000 or more depending on size and access. General landscaping to get competitive: another $2,500 to $5,000. The first budget draft had $2,500 for landscaping. The real number was closer to $15,000.

(Note: Image recommendation — a side-by-side photo showing a cleared lot comp versus the subject property's tree coverage would be effective here.)

The Line Item Everyone Forgets: Interior Painting

I saved this for its own section because it's the single most commonly missed item I see.

Interior painting has increased significantly. In the NH market, painters are currently charging approximately $5 per square foot. A year or two ago, that number was $2 to $3 per square foot.

On a 1,000-square-foot property, that's $5,000. On a 1,500-square-foot flip, $7,500. On a 2,000-square-foot property, $10,000.

When we built the initial budget live with the coaching group, painting wasn't on the sheet. We came up with $72,000. When we added it back in, the number became $88,000 to $90,000.

That $16,000 to $18,000 gap is material. At $189,000 acquisition and $88,000 in rehab — you need your ARV assumptions to hold at $385,000 or better just to have a reasonable margin at conventional financing. At hard money rates, the deal gets tight.

The fix is simple: add a painting line item to every budget, use current rates, and do it before you finalize your offer — not after.

Don't Skip the Structural Contingency

Every rehab budget should include a structural contingency line. Not because you necessarily expect structural issues — but because you will sometimes find them.

On this property, I built in $2,000 as a minimum. On larger properties or anything with a known foundation concern, that number goes up. But zero is not an acceptable number. If you've walked the property and confirmed everything looks clean, the contingency may not get touched. That's a good outcome. What you're protecting against is the $3,000 discovery mid-project that wasn't in the scope.

The Completed Budget

For the property we analyzed, here's where we landed:

1. Roof: $10,000
2. Siding (painted, not replaced): $6,000
3. Landscaping and tree removal: $12,500–$15,000
4. Full plumbing replacement: $20,000
5. LVP flooring: $3,000
6. New bathroom: $8,000
7. Kitchen: $10,000
8. Interior painting: $5,000
9. Sheetrock and drywall repairs: $2,000
10. Structural contingency: $2,000
11. Dump fees: $500–$1,000

Total: approximately $79,000–$82,000 before the basement scenario. Add the basement finish with bedroom and bath: $88,000–$92,000 total.

The Bottom Line

A flip budget isn't a document you build once at the start and forget. It's a working tool you refine as you learn more about the property. The line items in this article aren't definitive — costs vary by market, contractor relationships, and property condition.

What is consistent: the properties that perform on a flip are the ones where the investor knew their numbers before they made the offer. The surprises that kill margin are usually things that were knowable — if you'd walked the street, updated your labor rates, and remembered to put painting on the sheet.

Build the budget like the margin matters. Because it does.