GuideThe money
How the numbers work
Exactly what goes into Budget, Spent, Remaining, and Projected Profit, with the example house worked through.
- Where it is
- The four numbers at the top of every house page
Four numbers sit at the top of every page of a house. They are worked out the same way everywhere they appear: the budget page, the P&L, the dashboards, and the exports.
Example
1418 Maple Avenue
Ashland, VA · Fix and flip · Rehab
Budget
$73,260.00
Spent
$24,437.40
Remaining
$48,822.60
Projected Profit
$21,093.35
Budget
The example has $66,600 of lines. Its contingency is 10%, which is $6,660. Budget is $73,260.
- Lines marked Cut don't count.
- Lines in Holding Costs don't count. They belong to the hold.
- A line with no amount counts as $0.
Spent
Ten expenses have posted on the example, from the $3,450.00 demo bill to $612.40 of paint. Spent is $24,437.40.
These never count as spent:
- A voided expense
- A loan draw. It is the lender's money coming in.
- A contractor's invoice you haven't accepted
- A bid, accepted or not
- An expense in Holding Costs. It counts toward the hold instead.
Remaining
For the example, $73,260 minus $24,437.40 is $48,822.60. When less than 10% of the budget is left, the number is flagged “Under 10% of Budget.” Below zero it turns red and reads “Over by” the amount.
Projected Profit
Example
Projected profit
Exit − purchase − rehab − hold − selling
- ARV
- $289,000.00
- Purchase price
- − $160,000.00
- Rehab (budget, with contingency)
- − $73,260.00
- Hold (estimate, with loan costs)
- − $17,306.65
- Selling costs
- − $17,340.00
- Projected profit
- $21,093.35
Max offer
ARV − rehab − hold − selling − target profit
- ARV
- $289,000.00
- Rehab (budget, with contingency)
- − $73,260.00
- Hold (estimate, with loan costs)
- − $17,306.65
- Selling costs
- − $17,340.00
- Target profit
- − $20,000.00
- Max offer
- $161,093.35
| Part | Before the sale closes | After it closes |
|---|---|---|
| Exit price | Your ARV estimate, or the sale price once the house is under contract | The sale price |
| Rehab | The larger of Budget and Spent | Spent |
| Hold | The larger of your hold estimate and the holding costs you've paid | The holding costs you've paid |
| Selling costs | Your selling cost estimate | The same field; update it at closing |
A sale has closed when the house has a sale price and its status is Sold.
Why profit counts money you haven't spent
Halfway through the example, only $24,437.40 of the $73,260 budget is spent. If profit counted only what's spent, it would look $48,822.60 better than it is, and then shrink with every receipt. So the budget counts in full until the house sells.
Once spending passes the budget, profit follows what you've spent. Going over always shows.
The hold
The hold is what it costs to own the house until it sells. Before the sale it is an estimate with two parts:
- Projected hold cost, which you type on the house: taxes, insurance, and utilities. $2,400 for the example.
- Loan costs, worked out from Financing: points, lender fees, draw fees, and interest on the full loan for the Holding months you set. $14,906.65 for the example.
Together that is $17,306.65.
As you pay holding costs, log them as expenses in Holding Costs. The hold stays at the estimate until what you've paid is larger, then follows what you've paid. A first small utility bill doesn't replace a five-month estimate.
Max offer
It uses the same rehab and hold as projected profit. For the example it is $161,093.35. Buy at the max offer and finish on budget, and you make your target profit. See Analyze the deal.
Things that move a number, and things that don't
| When you | What moves |
|---|---|
| Post an expense | Spent goes up and Remaining goes down. Profit doesn't move while you're under budget. |
| Raise a budget line | Budget and Remaining go up. Profit goes down. |
| Approve a change order | The same as raising the line it's linked to |
| Accept a bid | The line's budget becomes the bid. Spent doesn't move. |
| Fund a draw | Nothing at the top. Holdback left goes down on Financing. |
| Accept a contractor's invoice | An expense posts, so Spent goes up. |
| Void an expense | Spent goes down and Remaining goes up. |
| Add other income | Profit and the max offer go up. |
Rentals
Once a house has a lease, owners and admins see rental numbers at the top instead: rent, collected this month, owed, and cash flow for the year. See Leases and rent.