Case Study: Cost Forecasting & Scenario Planning for a 1970’s House RemodelAbstract

Abstract
Developed a cost forecasting and scenario planning tool in Google Sheets for a 1970s house remodel, integrating estimates and receipts into a real-time dashboard. The tool flagged early cost overruns, including a $33K budget excess on an $80K estimate midway through the project, and allowed the team to explore various financial scenarios—such as living in or selling the property—by adjusting key factors like material costs, timelines, sale prices, taxes, and potential appreciation.

Background
A major remodel was planned for a 1970s home, which included a layout redesign and the addition of two bathrooms. The general contractor, with over 30 years of experience, faced numerous decisions, as the homeowners were uncertain whether they would live in or sell the property. While the project required maintaining high-quality work, it was crucial to keep the remodeling costs under control amidst numerous options and unknowns.

Objectives
The goal was to create a user-friendly tool that leveraged free resources to:

• Consolidate and display all project cost data (estimates and receipts) in one centralized location.

• Provide real-time visibility into actual spending versus initial estimates.

• Enable scenario analysis to compare different financial outcomes (e.g., living in versus selling the property), adjusting variables such as material costs, timelines, sale prices, taxes, and potential appreciation.

Deliverables

• Centralized Tracking System:
  Utilized Google Sheets and Python to integrate and aggregate data from various project sources, ensuring seamless tracking of costs.

• Simplified Dashboard:
  Designed an intuitive dashboard to provide a real-time comparison between current expenditures and the original budget. This allowed the project team to easily spot discrepancies, such as a $33K budget excess on materials midway through the project.

• Scenario Planning Capabilities:
  Customized the tool to facilitate the exploration of different financial scenarios, providing insights into potential costs, timelines, and outcomes based on various assumptions (e.g., sale price, market appreciation, and taxes).

Outcomes

• Increased Financial Transparency:
  The tool provided a clear, real-time overview of the project’s financial status, enabling immediate detection and resolution of cost overruns.

• Enhanced Decision-Making:
  The ability to compare various scenarios empowered the homeowners and contractor to make informed decisions about the project’s direction, whether to adjust scope, proceed with the current plan, or explore alternative options.

• Cost Control:
  Early identification of budget overruns allowed the team to manage costs more effectively, ensuring high-quality work was delivered within the agreed financial parameters.