Flipping Houses Legal or Illegal

**rehablist12** · 11-05-2009, 01:08 AM

Because of the negative depiction of flipping houses by some media outfits over the years, many people have been wondering if this particular method of real estate investing is illegal. However, flipping investment properties for profit is not against the law and many real estate investors can attest to that. Such a means of living can only be called illegal if it involves fraudulent activities.

Although there are some who raise their eyebrows whenever they hear the word “flip,” flipping is a term used in economics to describe the act of buying and quickly selling of any asset, which include real estate.

So when the same principle is applied to the housing industry, flipping houses can be considered the process of acquiring and quickly selling a property for profit. Some real estate investors purchase a dilapidated home, make some repairs, and resell it a higher price, while some sell properties “as is” and at a slightly marked up price.

There is absolutely nothing wrong with buying and selling properties. Like what was said before, flipping homes is considered illegal only when it involves fraud. There are investors who are tempted to commit mortgage fraud just to earn huge sums of money. They include those who pay appraisers to inflate a property’s value to acquire bigger loans either for themselves or their buyers. Flipping is illegal if the investor fabricated legal documents, such as tax returns, pay stubs, and w-2s, or if he or she manipulated payments just to get a loan approved.

For a real estate investor, as long as you’re not doing something that is against the law, you shouldn’t be afraid to flip homes for a living. Being involved in real estate investing is a great way to earn money because the housing business is a lucrative industry that offers great opportunities for many people.

Meanwhile, to learn more about flipping houses and other types of real estate investing, log on to RehabList.com.

**markbrian** · 11-05-2009, 06:55 AM

Absolutely correct! If we ever come to a point that buy low sell high is made illegal, America is screwed.

People need to take anything the media says or anything they see on the internet and do some due diligence for themselves.

**woerter.carl** · 11-17-2009, 11:45 PM

When you buy a property, all the rights involved becomes yours including the right to sell it no matter when and how much. It's your personal right. Therefore, absolutely, it is not illegal. It's just you're too smart to make money (in legal way) and it's not a crime.

**Ortigas houses** · 12-06-2009, 05:56 PM

It is not illegal as long as you have the property under your control. All the rights and responsibilities are all yours as presented by the documents covering the whole property. To make it short, as long as you have cleared all the aspects regarding the legal matters on it,you have the rigth to sell it on your choice of price and deals.

**PreviewOrangeCounty** · 12-07-2009, 07:55 PM

Absolutely legal, in my market there are quite a few "corporate" investors flipping properties and they are doing quite well.

**cdloanmod** · 12-10-2009, 02:38 AM

Flipping as such is not illegal, its just that in many such cases authorities have found some irregularity. So quick flipping is bound to raise eyebrows.

**markbrian** · 12-10-2009, 08:01 AM

One thing to keep in mind is the various rules lenders have regarding the seller's length of time on the title. It could cause some potential buyers difficulty in obtaining certain types financing if the rules have not been changed.

**landmarkhq** · 12-29-2009, 10:57 AM

Flipping and Wholesaling is a fantastic way to make money in real estate. In my option, there is no better way, especially when the investor can incorporate sales with seller financing (selling on land contract). This creates passive income for the investor and provides financing for the buyer - a win win in most scenarios. We sell on land contract as often as possible as it is a great way to bring financial stability to our business.

**bangkokofficespace** · 01-12-2010, 07:03 PM

It is not illegal, once you bought the property it is yours. You have all the right to do whatever you wants in it,as long as the papers/legal documents prior to the property is cleared.