Three items are essential for a budget: (1) a checklist of things to include in the budget; (2) accurate figures for those items; and, (3) a timeline of how long everything will take.
Overlooking the little things can add up to big money. Most first-time flippers do not think about debris removal, permit fees, builder’s risk insurance, liability insurance, inspection fees, subcontractor license fees, utilities, and small tools. They are often overly optimistic regarding the time everything will take. Many completely fail to take into account normal delays caused by work stoppage until the local government inspection can be completed for that stage.
Subcontractor license fees
In most localities you must obtain a building permit before you can begin remodeling or renovating a property. When the project is completed, you must submit a list of the names and addresses of your subcontractors, ask for a final inspection, and request a Certificate of Occupancy (C/O). The C/O allows someone to move in, no buyer is going to pay top dollar for a property without a C/O. If some of your subcontractors do not have business licenses, you will not be able to obtain your C/O until you pay for their business licenses or at least the license fees that would have been attributable to your job. To avoid nasty surprises, always make sure your subcontractors have current business licenses.