Rehab budgets go wrong in two predictable ways. The scope is too vague to price honestly, so the real cost only appears once walls are open; or the payment stages are tied to the calendar instead of finished work, so cash runs out halfway. Both are fixed on paper before the first swing of a hammer. This guide gives the structure we use, without made-up numbers: your prices depend on the house, the market and the finish level, and your lender sets its own draw rules.
Part 1: the scope, written by trade
Organize the scope in the order the work actually happens. Every line gets five things: a location, a description specific enough to verify, a quantity, a unit, and a price. Here is how the sections and a few sample lines look.
| Section | Example lines (described, not priced) |
|---|---|
| 1. Site, permits, protection | Permit and plan fees for the city or county; dumpster pulls (each); floor and fixture protection; lead-safe setup if the house predates 1978 |
| 2. Demolition | Remove kitchen cabinets and tops; remove carpet and pad (sq ft); remove damaged drywall (sq ft, by room) |
| 3. Structure and envelope | Replace rotten subfloor (sq ft allowance); sister or replace framing (lin ft); repair fascia and soffit (lin ft); roof repair or replacement (squares) |
| 4. Systems rough-in | Electrical panel and circuits by a licensed electrician; supply and drain lines by a licensed plumber; HVAC equipment and ducts |
| 5. Insulation and drywall | Insulation (sq ft); hang, finish and texture drywall (sheets or sq ft) |
| 6. Finishes | Cabinets (lin ft) and tops (sq ft); flooring by type (sq ft); interior doors (each); trim (lin ft); paint (rooms or sq ft) |
| 7. Fixtures and final | Plumbing fixtures (each); light fixtures (each); appliances (each); hardware; final clean |
| 8. Exterior and site | Pressure wash; exterior paint; concrete repair (sq ft); landscaping and grading |
Allowances and unit prices for what you cannot see
Some costs cannot be known until demolition. Name them in the scope with a unit price instead of leaving them out: subfloor per square foot, sill plate per linear foot, framing repair after a termite treatment, a sewer-line repair after a camera inspection. A surprise then becomes a priced change order, not an argument.
Alabama items that belong in most scopes
- Pre-1978 houses. EPA's Renovation, Repair and Painting rule requires anyone paid to disturb paint in housing built before 1978 to be certified, including small firms. Give lead-safe setup and cleanup their own line so they are not cut when the budget gets tight.
- Termite damage. Common in older Alabama houses. Treatment comes from a licensed pest control company first; the framing repair follows as its own line.
- Crawlspace moisture. Humid summers soak crawlspaces. Vapor barrier, drainage at the downspouts and grading usually belong in the scope before new flooring goes down.
- Clay soil and concrete. Settled walks and driveways on expansive clay are common; see the concrete on clay soils guide before pricing flatwork.
- Coastal houses. In Gulf Shores, Orange Beach and the rest of Baldwin County, budget for salt-air wear on exterior metal, and check flood-zone rules with the building department before a large renovation.
Part 2: the draw schedule, tied to visible milestones
A good draw ends at a point an inspector can confirm by looking. Group the scope sections above into stages like these, and write the finished condition for each stage in plain words.
- Mobilization and demolition complete: debris gone, permits posted, the house down to what stays.
- Structure and dry-in complete: framing and subfloor repaired, roof and openings watertight.
- Rough-ins passed: electrical, plumbing and mechanical rough inspections signed off where permits require them.
- Drywall complete: insulation in, drywall hung and finished, ready for paint.
- Finishes installed: cabinets, tops, flooring, doors and trim set.
- Final: fixtures, paint, punch list, final inspections and clean.
Each line of the scope belongs to exactly one stage, so the stage totals add up to the scope total. When the lender's inspector arrives, the stage description and the photos from that stage are what they check against.
Change orders
Every change, up or down, goes in writing before the work: what changed, the price from the agreed unit rate, and which draw stage it lands in. Keeping change orders tied to stages means the draw schedule stays true to the money, which is the whole point of having one.
Review the scope before it goes to the lender
Read it once as the inspector will. Every line should point to a place in the house and a quantity someone could count, and every stage should end at work that can be photographed finished. Lines that fail either test are the ones that cause disputes later.
Before you commit to a purchase price
Price the scope first, then decide what you can pay. The free Deal Analyzer takes the rehab total and works back to a maximum offer, profit and return, so the scope and the offer are built from the same number.
Source
- U.S. Environmental Protection Agency, “Lead Renovation, Repair and Painting Program,” epa.gov (page updated June 17, 2026; read October 16, 2026).