Nope. Not six sigma. We would love to be lean and on our model, but no dice, oh sage management guru.
No no six sigma... But six grand overage on Hazel? Yes!
We got hit with six grand in improvements today. What, pray tell, is the six grand going towards? Glad you asked. Would you believe a fence, and some steps? Steep lot and theft necessitated some changes.
Yep, the cost overruns of being a spec home builder is almost as fun as the cost overruns of being a house renovator or flipper. Actually they both suck! But hey, if you can't afford to play, you shouldn't be in the game.
We were not planning on more cost overruns. We have already had quite a few on the spec home... Including the theft of shingles, massive delays, and increased carrying costs due to those delays. But, again, this is par for the course.
So, our best free advice for those that are going into home flipping, or for those who are going to build a spec home for the very first time, would be to plan for those cost overruns. Just sit down and add 10 to 20% of whatever your budget is to the total amount. If you did your math correctly, and your calculations on improvements were (or are) realistic, this 10 to 20% should be pretty close to reality. It is better to know what reality is-even though it sucks-then to be slapped around blindly by unexpected costs. (That sucks more.)
We have said it before but it bears repeating: be prepared. Eventually we might get smart while we get a little more lean on these things. Right now we're bloated and no where near the model of perfection. Hang on lean perfection! We're trying.
Until next time...
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