flipping
Flipping is a real estate investment practice in which a buyer acquires a property at a relatively low price and then resells it at a higher price within a short time frame. In many cases, the investor renovates or upgrades the property to increase its market value before putting it back on the market. This strategy is often associated with rapidly appreciating housing markets, where rising demand can drive quick profits. The risk is that market conditions can change suddenly, leaving the investor unable to sell the property at a gain. An alternative approach is to target undervalued properties, improve them, and resell based on the added value rather than relying only on market momentum.
Property flipping becomes illegal when a property is purchased and then resold almost immediately at an artificially inflated price without meaningful improvements. Such schemes typically involve misrepresentation of the property’s value and often rely on fraudulent appraisals or false documentation to justify the higher resale price. These practices are considered mortgage or real estate fraud and are subject to criminal investigation and penalties.
[Last reviewed in September of 2025 by the Wex Definitions Team]
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