Importance of the Cost Breakdown

1. It’s hard to hit a target that you dont have.“Surprises” are almost never in the happy direction.

2. It’s hard to hold your crew and subcontractors to a budget unless you really have one.

3. Your team will enjoy beating budgets and timelines and you’ll enjoy rewarding them for excellence.

4. You must always know your exit before you enter. The cost breakdown connects the two and gives you a

measurement of how your plan is working.

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1. DEMO & TRASH HAUL

2. LANDSCAPE

3. CONCRETE

4. FENCES/GATES

5. POOLS & SPAS

6. FOUNDATION REPAIR

7. EXTERIOR CARPENTRY

8. PLUMBING

9. EXTERIOR ELECTRICAL

10. ROOF/GUTTERS/CHIMNEY

11. WINDOWS

12. STUCCO, DASH & MASONRY

13. GARAGE DOORS/CARPORTS

14. EXTERIOR PAINTING

15. INTERIOR ROUGH CARPENTRY

16. INTERIOR ROUGH ELECTRICAL

17. INSULATION & SEALING

18. HVAC

19. DRYWALL & PLASTER

20. INTERIOR CARPENTRY

21. COUNTERTOPS

22. INTERIOR PLUMBING

23. CERAMIC TILE

24. INTERIOR PAINT & RESURFACING

25. ELECTRICAL FIXTURES

26. MIRRORS

27. FLOORING

28. APPLIANCES

29. HARDWARE & SUNDRIES

30. MAKE READY TO SELL

Other Costs

Contingency 10%

Insurance

Utilities

Taxes

Interest

Other

Total

Any Questions?What else

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Q. Keeping track of costs?A. Choices:PaperCheckbookExcell SpreadSheetQuickBooksSpecialty Construction Software

A2. In all cases you will want to cost code all expenses, from hours worked to Home Depot purchases according to your cost code list and

the address of the project

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Q. Best choice for first time or one at a time?

A1. Open a business checking account named with the address of the property. Get wallet sized checks with

carbon copies.

A2. Discipline yourself to pay everything with those checks.

A3. Your CPA will love you.

When the house is sold, close out the account and start another one for the next house.

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A3. You want to minimize hourly labor by using qualified subcontractors as much as possible.

But if you have any hourly labor: Design a custom time card that makes it easy for employees to give you the correct information.

Most hourly employees will work for the subs or the general contractor. The general contractor will

probably have a similar system.

Time Cards with cost coding are to be done daily. After the end of the day the memory seems to fade.

(This memory fade almost never results in a lower or more accurate number.)

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Q. Who are the players?A1. We have found it best to subcontract as much work as possible. This is really the only way to

control your costs. After all the bids are in, you will know your costs almost exactly and your profit --(if you sell the project as you have planned)

A2. Subcontract all the “Big Chunks” of workHVAC, Roof, Concrete, Tile, Granite, Paint, Windows, Drywall, Insulation, Stucco, Plumbing, Electrical, Floors,

Landscape etc.

A3. Then Contract a “General Contractor” to supervise all the subs in A2 above and do all the rest of the smaller jobs. This should be a fixed number so that

all your costs are then fixed.6

Q. What does the GC do (either himself or with his employees?)

A1. Everything not done by subcontractors. Some examples might be: (some of these might be subs)

Board-Up and Re-Keying,Demolition and haul to Re Store

Finish Carpentry, doors, casing, base, crown etcCabinet install, Hardware install

Appliance Install,* Mirrors, Fixtures

And mainly supervise all the subcontractors.

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Q. If subs do everything, what do I do?

A1. Maintain the Energy-Wise aspect of your operation. Many will tempt you to take shortcuts.

A2. Be finding the next project.

A3. Market to get them sold quickly.

A4. Continuing Education. On Real Estate, Remodeling and Energy Efficiency.

A5. If you want to, you can help your community thru consulting with politicians & non profits. Habitat etc.

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Job Walk Thru FormThe forms on the following pages are expanded

And intended for use two ways:

1. Paper form to make notes during the walk aroundAnd use as a check list to not miss anything

2. Back at the office the form is a live Excel spreadsheetTo use for adding everything up.

Note: Keep this form to review weekly and at the endTo see how close your estimates were.

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