That’s not the kind of investor you want to be. You’ll earn a reputation rather quickly if you sell a home with marginal repairs. Here’s the best way to get protect how to protect your investment in rehab properties and reputation as a seller.

Get your offer price right.

Ben Creighton, founder and managing partner GHD Denver, a real estate investment partnership,  and I go into deep dive detail in my Rehabbing and Foreclosure Investment Teleclass with all the steps you need to consider in calculating a great offer, so I recommend you check it out.

But here’s the quick gist of how you do it:

You’ll want to write (in pen) out all of your expected expenses and your retail sales price to determine your offer number. Your profit should always be about 10% or $20,000 to protect you against unforeseen repairs and contingencies at closing time.

Hot Rehab Tip: Leave yourself a margin of 3 to 5% to protect yourself in the case of a collapsed sewer line (older homes), electrical fixes or foundation troubles or worse.

When you calculate your costs right, you are foreseeing your profits on the front-end, not scrambling to recover costs when things go awry once the repairs start.

Here are three more tips for protecting your property investment and reputation:

• Get all of your costs down on paper to determine your best offer. Get repair costs down to the cabinet and square footage on paint and electrical to make it easier to cost during the walk-through.
• Decide on a niche for property investments to streamline your rehab package.
• Be cognizant of a home built before 1950. Check electrical, plumbing and foundation for problems – these are the costliest repairs.

This month on The Investor Insights, we’re looking at alternative financing. In the teleclass I mentioned before, you’re going to learn some of the strategies for financing these rehab deals.

Paul is a real-life real estate investor in Denver, Colorado and he spends about an hour taking us through his history, strategies, techniques, tips and tricks!

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• 50 Cent overimproved a house he bought from Mike Tyson for $4.7MM adding a shoe room, ATV track and entertainment system programmed with 3,000 movies. Was on the market for $18.5MM for two years and still hasn’t sold. Hmmm, wonder why.
• T-Pain fared better buying a manse in Atlanta for $1.35MM and flipping for $3.8MM.
• Jay-Z and Beyonce are into land development up in Scarsdale.

Read the whole article at on Hip-Hop Home Improvement at Forbes.

Not sure if it’s global warming or what but I live and work out of my home and the ol’ swamp cooler just wasn’t cutting it anymore. The problem was that the ducts in this house (and electrical but that’s another issue) aren’t adequate to support central air. I replaced the huge octopus furnace a few years ago and did the asbestos remediation but adding costly duct work was not something I wanted to get involved with.

I called a few air conditioning companies and they all agreed that we needed duct work if we wanted central air but a few of the guys mentioned a ductless air conditioning system.  Basically, it’s a wall-mounted unit that is attached to a condenser. The guy promised that I’d be freezing in no time so I signed up.

For the ductless air conditioner (also known as a mini split), outdoor condenser, new electrical panel and upgrade I paid $5,000. Less than half the price that my neighbors were quoted for central air. PLUS, it qualifies for an energy efficient tax credit of $1,500.

It works great – I’m thinking of putting a sweater on even as I type this.

If you’re looking for an inexpensive way to add air conditioning to an old house or rehab project, go ductless! Here’s a link to the one we have:

http://www.fujitsugeneral.com/wallmounted9-12RLS.htm

Tom is a syndicator and rehabber based in Long Beach, California and he spends about an hour taking us through his strategy and sharing tips, tricks and the secrets to his success.

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