Mundo Sanchez explains how to project cash flow and budget for rehab projects so you don't run out of money mid-project. Learn to analyze expenses and anticipate financial shortfalls before they hit.
So, like, you can look at the financials in this way and start to project. Like, when are you going to hit the wall? If you lend Money, let's say 50k and you're looking at financials, you want to know, like, I would be picking out, okay, what's, what's my run rate of expenses? We've already identified here, we've highlighted, it's $821 plus. I added back the mortgage payment to get my overall, as it sits today, my overall expenditure, my negative cash flow. Is that every month? Right. Well, if I'm doing a bunch of rehab, which you'll probably see if you're lending money, I would want to go up, go and add up. Okay, how are we doing on the budget? If they're saying, you know, we're spending rehab on a B and C, let's go find a B and C on the profit and loss statement. If I don't find a B and C on the profit and loss statement, I'm going to start asking questions of like, yo, bro, where's the painting? Like, I know we have ten grand in the, in the budget for painting. Like, I don't see that anywhere. But. Well, in this case, you actually do see close it's nine grand in painting. But you can start to identify and that can also help you identify, okay, we spent ten grand in painting or nine grand in painting. What's our other budgetary items left and is that shown on this profit and loss statement? And if, you know, let's say, for example, you have this rehab project, you only have 45k left in your bank account and you know there's still 60k of rehab left. And you know there's no way they're bringing in revenue because you're doing rehab. You know, you have a problem, right? So, like, you, you can look at the financials in this way and start to project, like, when are you going to hit the wall? Like, for me, for example, I already know I have five months till I hit the wall on this project, until all of us are going to have to start stroking a check to start covering, you know, mortgages, right? So you need to know that and be prepared and take the appropriate action. If I didn't know this answer and I just let this go on for five months, I had a year, right? And I just wake up and be like, oh, wait, where did all our cash go? That's not a position you want to be in. I have five months of time so I can take the appropriate action and leeway and get this thing up off the ground. And I know the sense of urgency that I have to have with executing on the project.
