I budgeted the rehab down to the dollar and never budgeted the months

Where did the three months come from originally? If the contractor said it casually and you wrote it down as a plan, that's the whole gap right there. I've started asking for a week by week sequence before I sign anything, even on work I haven't bought yet, mostly to see whether they can produce one.

The extension point interests me more than the interest. Pull your hard money note and read what it actually says about extensions. Some of them let the lender decline, some price the extension per month, and a few flip the rate up on maturity whether or not you extend. You paid 1,380 and got a term, which means you were on the friendlier end of that range. Worth knowing which version you have before deal two, and get it confirmed in writing rather than from the phone call.

520 a month on a vacant house sounds low to me for a winter, honestly. Did you have to keep heat on to protect the pipes?

Panel work plus inspection sign off is almost never a same week thing. And on a 1950s house, once the inspector is in the panel he can start asking about what's behind the walls feeding it. You got off light if all you lost was a week.

Can someone define carry for me plainly? I think it means the money you spend just owning the house while nobody lives in it, so interest plus taxes plus insurance plus utilities. Is that all of it, or is there something else people include?

@ember that's it, plus anything else that bills monthly while the house is empty, lawn, snow, alarm if you have one.

@rigging the two costs you listed aren't the same kind of problem though. The 8,000ish of extra carry was a schedule miss and you can fix that with a fatter timeline. The 9k on the refinance was an assumption you never controlled. I have a rate I was quoted in June sitting in a model from a deal I closed in November and it was wrong in the same direction. Now I run the refinance twice, once at the quote and once at the quote plus a point and a half, and if the second version leaves too much money trapped I price the purchase lower or I walk.

Adding a months line to my sheet tonight. I had rehab cost and I had ARV and literally no row for time, which is embarrassing given how much of this thread is time.

@keystone the draw inspections add to it too. Every draw request on the deals I've worked, someone has to come look before money moves, and that's five to ten days each time. Four draws and you've spent most of a month waiting to get paid, which means the crew slows down waiting on materials money.

I'll push back a little. The timeline didn't blow out on its own, it blew out because you bought a 70 year old house with a scope you couldn't fully see and then treated the quote as a ceiling. Eight week tub lead time is real, sure, but the panel and the permit were discoverable before you closed. Longer timeline in the model would have made the deal look worse and you might have paid less for it, so it's not wasted, I just don't want you to conclude the fix is a bigger multiplier.

@rigging when you shop the next hard money loan, which terms would you actually compare? I've got three lenders on my list and all I've been comparing is rate and points, which after reading this looks thin.

I run 1.5x on any contractor timeline and 2x if I haven't worked with them. Thin margin deals mean carry eats me faster than anyone, so I'd rather look conservative and lose a bid than close and sit there paying interest on a vacant house. The rent drop of 75 to fill in December is the detail I'd underline for people, seasonality is real in most markets and nobody models it.

I've been reading BRRRR posts for about a year before doing one, and yours is the clearest version of the thing that keeps stopping me, so let me try to put it in order.

You had two separate failures and they need two separate fixes.

The first is schedule. Carry is a monthly cost and you modeled it as a fixed lump. Fix it by building the model per month, with the drawn balance rising as draws fund, so you can see what month seven costs you before you're in it. Then decide the number of months you can survive rather than the number you expect. @flint's 1.5x is one way to get there, @quarry is right that the better version is knowing more before you close, and both of you are describing the same discipline from different ends.

The second is the refinance, and this is the one I'd change first. You held a rate assumption for nine months without touching it. That number is the whole capital recovery step, and it isn't yours, it belongs to the lender and the appraiser. What I'd do is write the model with the refinance rate as a variable and check what happens at plus one point and plus two, and I'd get whatever the lender will actually put in writing about program terms, loan to value limits, and how long you need to own it before they'll do a cash out at the new value. Those requirements vary by lender and change, so a phone conversation in spring is not a term sheet in January.

The last piece is what you do about trapped capital. You left 22k in. That doesn't make the house bad, it makes the repeat step slower, and I think people would be better off deciding in advance how much they'll accept leaving in before they start, rather than discovering the number at the closing table.

Question for you: if you had known in month one that the refinance would return 9k less, would you have finished the rehab differently, or would you have just paid less for the house?

Lead times rarely make it into anyone's spreadsheet and they're the most predictable part of the whole job. Tubs, windows, custom cabinets, certain panels, anything with a special order. On my jobs I order that stuff the week we close, before demo, even if it sits in the garage for a month. Sitting inventory is cheaper than sitting interest.

Also @rigging, seven months from three isn't unusual for a first one with a contractor you didn't have history with. I'd be more worried if you told me you hit three.

You were a small job in a queue, and small jobs move when nothing bigger is asking. That's how it went in the five years I ran a service business. Not personal, just capacity. If you want priority you either pay for it or you become the customer who calls every week and pays draws the day they're invoiced.