Most real estate investors are familiar with the concept of the fix and flip. But have you ever heard of a "fix and flop"? A fix and flop happens when unprepared or over-confident investors charge into a project without doing their homework. They pay too much, hold it too long, and price it too high--leading to a loss of profits or worse.

In the bestselling book, "Flip: How to Find, Fix and Sell Houses for Profit", by Rick Villani and Clay Davis, the authors show investors the Maximum Offer Formula. This one piece of information can keep you from joining the ranks of the floppers.

"Successful flipping doesn't happen by accident," Villani says. "If you use the Maximum Offer Formula, and a potential investment doesn't make the grade, you pass. This formula keeps us all out of trouble."

Area investors are invited to attend a workshop presented by millionaire real estate investor Kevin Mackessy, based on "Flip." Mackessy, who was personally trained by the authors, will share his knowledge at Find, Fix and Flip seminars on Saturday, Oct. 13, Nov. 10 and Dec. 8, 10 a.m. to 12:30 p.m. at Keller Williams in Highlands Ranch (200 West Plaza Dr.).

"Flipping houses can be profitable if you have the right information," Mackessy says. "There are a lot of 'formulas' out in the marketplace, but the Maximum Offer Formula illustrated in 'Flip' is the best by far. It will definitely help you make good decisions and keep you out of trouble."

In addition to the Maximum Offer Formula, the workshop delivers the acclaimed Five Step Process that professionals use to build profits. Mackessy shows how to find, analyze, buy, fix and sell properties in any market.

But the key is the four-part Maximum Offer Formula. Start with the eventual selling price of the home, subtract improvement costs, subtract quiet costs--the often overlooked expenses associated with buying, holding and selling--and lastly subtract the minimum profit you want.

"This formula is crucial. Never simply take the selling price and subtract your fix-up costs and expect that to be your profit. Professionals call that number the TV profit," Mackessy says with a laugh. "Be realistic. Maybe the house doesn't work as a flip. Fix it and rent it out, or simply pass. But don't stretch the numbers just to generate a deal. Be patient."

Trying to be patient can be tough in the real estate investing game where you have to move quickly on great deals. This fact can create conflict between thoroughly analyzing a property and making a timely offer. Fortunately, the Maximum Offer Formula gives investors a proven process that helps make the analysis of potential deals faster, allowing for quick reaction times to great deals.

By including the quiet costs and accounting for risk, the formula allows you to make strong offers, or when necessary, steer clear of riskier deals.

So what are quiet costs? Simply put, quiet costs are the myriad costs associated with flipping a house. Quiet costs are sneaky. They can creep up on you and steal all your profit. Quiet costs are grouped into four categories: buying costs, holding costs, cost of money and selling costs. Each of these areas must be accounted for to ensure a successful flip project.

The key to successful flipping is to make the right decision, not necessarily an overly quick decision. You will be able to present your offers with confidence, keep your emotions in check, and walk away from unprofitable deals without regret.

So remember, if the house does pass the maximum offer formula, you can move forward with confidence. Do your homework. With the right training, you will achieve a successful fix and flip project, and avoid joining the ranks of the fix and floppers.

To register for a Flip Workshop, visit flipworkshop.com, send an email to kfmackessy@comcast.net or call 720-206-0203. Cost is $49 and all attendees receive a copy of "Flip."

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