$3k is a huge number...for a bathroom repair..even if you had to demo tile and replace the mixing value it should cost quite that much. 

This is certainly not a situation I want to put myself in again in the future, but he already started the demo work for the paneling.

You can figure most basic things out like painting, trim, basic carpentry, vinyl flooring, landscaping, demo, tiling on youtube.

Almost all of those require separate dedicated lines.I know it's a lot of work, but sometimes it's just easier in the long run to demo the lath & plaster, do the wiring the right way, install sheetrock which you are going to do anyway, put on new moulding and paint.

Obviously this is more expensive, so expect demo costs to be higher. 

Pocket this cash and use it to float the other progress payments.If they still want some amount of a payment it should be minimal just to cover a few days of up front labor for a crew for demo and that stuff.  

The entire cost of the project is capitalized -- this includes the demo and disposition.

I've seen them do demos using content from something like Zillow. 

This is what I have so far....Demo- $1000 (work and dumster)Roof- $5000Exterior Paint- $2.00 per square footInterior Paint- $1.25 per square footWindows- $200 eaInterior Doors- $200 eaExterior Doors- $400 eaKitchen- $4000 (includes cabinets, counter top, appliances, sink)Bathroom- $2500 (complete bathroom)Flooring- $2.50 per square foot (finished hardwoods)Drywall- $3.00 per square footTile- $3.00 per square foot (ceramic)Carept- $2.00 per square footElectric Panel Box- $1000Water Heater- $500HVAC- $3500Lawn Care- $500- $1000Misc- $5000 Does this look abaout right without breaking it down into every item?

I bid on a place that stopped after demo of the interior... needed tons of work.