flipping
Flipping is a slang term for a popular real estate investment strategy where someone buys a property at a low price and quickly resells it at a higher price. Typically, the person will make improvements to the property before attempting to resell it.
According to Investopedia , flipping can be done in a hot market, a market that is rapidly appreciating. A risk is that these markets are volatile and can depreciate unexpectedly, leaving the person with a piece of property that cannot be sold at a higher value. Flipping after improving an undervalued property instead of trying to resell it in a hot market is a safer option because the property is less dependent on the market conditions.
Illegal property flipping is when a person buys a property with the intent to quickly re-sell it at a superficially increased price. The main goal of this is to gain a considerable profit even though there may have been only minor, if any, improvements to the property. According to the FBI , the success of illegal property flipping depends on the expediency of finding a buyer and selling the property as quickly as possible.
[Last reviewed in July of 2021 by the Wex Definitions Team ]
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