In order to develop a somewhat reliable project budget, we need a real property, which we now have (finally). I mentioned in the 04/12/2009 post our efforts to put a rehab budget together. Let’s look at this process in some more detail.

1. Fact: Our total loan amount for the sustainable project includes the purchase price of the property plus the money for the green rehab.
2. To pursue any meaningful budget exercise, we needed a basic plan for our green rehab ideas. Our project principles and rationales provided that framework.
3. We shared this information with vendors and contractors and arranged for meetings at the property to discuss the project, its various components and the associated work in more detail.
4. After we shared this basic information with vendors and contractors, we solicited initial ballpark estimates. These estimates became the foundation for our rehab budget.

The tricky part in all this is that we have no final design or engineering. In other words, some of our assumptions may have to change down the road. Those are the same assumptions on which the contractors and vendors based their estimates, which we in turn used to as the foundation for the budget development. Sounds like a house of cards, doesn’t it?

Why would some assumptions change? Well, this is an old house, and we don’t have a full inventory of the building. Electrical, plumbing and heating will most likely need to be completely rebuilt. But we can’t look into the walls to see what other problems, if any, are lurking there waiting to be discovered – such as structural damage (God forbid).

I owe an apology to all vendors and contractors that were kind enough to issue their estimates. I did to them what I do not like having done to myself in my capacity as a landscape architect. And that is to answer the question of “what does the project cost,” based on very little research and very vague parameters. You typically can’t win in these situations, and risk an unhappy client because the budget will change with every piece of new information that rolls in.

The contractors and vendors have my sympathy and my gratitude for working with the limited information I had at the time.  The exercise wasn’t fruitless because we got to meet and talk about the project. The vendors and contractors extracted more details on our plans and expectations, while we were able to evaluate a potential working relationship.

I don’t plan to hold the vendors and contractors to their estimates, but use the numbers to the development of the initial project budget – something that I still need to complete.