Update 2021 Rehab Budget Estimates

[Matthew Nicholson]

Looking for my next flip (sold 2 houses in March, then took a break), and I'm hearing from everyone that materials have gone through the roof (heh).

I spent some time today going through NAHB, BLS, BOL, CNBC, etc. looking for year-over-year increases, including overall inflation numbers from ShadowStats. I've also polled several of the people in my network (contractors, flippers, wholesalers, brokers) asking what they are seeing.

Below is my updated budget (padded) for Spring/Summer 2021. (1) Note that the 2020 numbers are a padded (I pad everything) high average of budgets pulled from 4 houses I flipped in the PNW in 2019-2020. (2) If the official numbers were below inflation, I used Inflation (Shadowstats.com). (3) The overall increase in price on my breakdown is close to the overall data I've found online, which makes me think I have a decent updated budget for eyeballing deals with. (4) To reiterate, the numbers I started with were unique to my situation in the PNW, so please don't take them as gospel for you!

Full gut/rehab (3/2 SFR)	2020	2021 April	Multiplier Materials*	Materials % of job	Multiplier Labor	$ Increase
01: Plans / Permits	Plans / Permits	$ 5,000	$ 5,500	10%	0%	10%	$ 500
02: Demolition		$ 5,000	$ 5,500	10%	0%	10%	$ 500
03: Foundation		$ 20,000	$ 22,000	10%	50%	10%	$ 2,000
04: Roof / Gutters		$ 17,000	$ 18,870	12%	50%	10%	$ 1,870
05a: Exterior Paint	Exterior Paint	$ 7,000	$ 7,700	10%	50%	10%	$ 700
05b: Siding		$ 5,000	$ 5,500	10%	50%	10%	$ 500
06: Windows		$ 5,000	$ 5,500	10%	50%	10%	$ 500
07: Garage		$ 5,000	$ 5,500	10%	50%	10%	$ 500
07b: Driveway		$ 5,000	$ 5,500	10%	50%	10%	$ 500
08: Framing		$ 5,000	$ 9,500	170%	50%	10%	$ 4,500
09: Finish Carpentry		$ 5,000	$ 9,500	170%	50%	10%	$ 4,500
10: Sheetrock / Insulation		$ 20,000	$ 22,000	10%	50%	10%	$ 2,000
11: Interior Paint	Interior Paint	$ 7,000	$ 7,700	10%	50%	10%	$ 700
12a: Flooring (laminate)	Flooring (laminate)	$ 5,000	$ 5,500	10%	50%	10%	$ 500
12b: Flooring (carpet)	Flooring (carpet)	$ 5,000	$ 5,500	10%	50%	10%	$ 500
13: Kitchen	All new cabs & countertops	$ 7,000	$ 9,940	170%	20%	10%	$ 2,940
14: Bathroom		$ 5,000	$ 5,500	10%	50%	10%	$ 500
15a: Plumbing Rough		$ 7,000	$ 7,700	10%	50%	10%	$ 700
15b: Plumbing Final	Fixtures, water heater, garbage disposal, dishwasher	$ 2,500	$ 2,750	10%	50%	10%	$ 250
16a: Electrical Rough		$ 7,000	$ 8,400	30%	50%	10%	$ 1,400
16b: Electrical Final	Fixtures	$ 2,500	$ 3,000	30%	50%	10%	$ 500
17: HVAC Work		$ 5,000	$ 5,500	10%	50%	10%	$ 500
18: Appliances	Range, Garbage disposal, dishwasher	$ 4,000	$ 4,400	10%	0%	10%	$ 400
19a: Yard	Cleanup	$ 2,000	$ 2,200	10%	50%	10%	$ 200
19b: Fence		$ 5,000	$ 9,500	170%	50%	10%	$ 4,500
20: Basement / Crawlspace	Vapor barrier	$ 3,000	$ 3,300	10%	50%	10%	$ 300
Contingency	Stuff happens	$ 5,000	$ 5,500	10%	50%	10%	$ 500
trash haul	Final trash load	$ 500	$ 550	10%	0%	10%	$ 50
mow lawn		$ 500	$ 550	10%	0%	10%	$ 50
Staging		$ 3,000	$ 3,300	10%	0%	10%	$ 300
		$ 180,000	$ 213,360				$ 33,360
			16%

Does this make sense? Have you used a different method to accommodate rising prices in your budget estimates?

TL;DR I can just add 16% to my cookie-cutter eyeball budget from 2020.