Contingency Budget
Extra budget reserved for unexpected costs — typically 10-20% of rehab total.
Contingency is your 'stuff goes wrong' fund. Behind every wall is a potential surprise: bad plumbing, mold, structural issues, permit requirements you didn't anticipate. Industry standard is 10-15% for experienced investors on light rehabs, 15-20% for heavy rehabs or inexperienced investors.
Kaison's P90 model applies a 15% default buffer to rehab costs, which functions as an automatic contingency. If your variance learning profile shows you consistently run 20% over, the buffer adjusts upward.
Scope of Work (SOW)
The detailed list of all renovation tasks, materials, and costs for a project.
P90 (90th Percentile Adverse Scenario)
A pessimistic estimate: what happens if things go 90th-percentile wrong.
Variance Learning
Kaison's system for calibrating estimates based on your actual deal history.
Carrying Costs (Hold Costs)
Monthly costs of owning a property during renovation: interest, insurance, taxes, utilities.
Educational content only. Consult a CPA or attorney for advice specific to your situation.