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Is Flipping a Legitimate Real Estate Strategy?

A lot of people have the false impression of flipping, on whether or not it is legal. There have been some situations where investors, in their eagerness to close on deals, do some tweaking with the activities involved in flipping properties. However, flipping, in itself, is NOT illegal, but is a very legal, profitable business.

Flipping is when you buy a piece of property that you can "flip" or sell to another buyer for a profit. Anytime you buy and sell a house is called flipping. But the term is more associated with wholesaling.

What is wholesaling? Wholesaling is when you control a piece of property and sell it to a buyer for a profit. The difference between wholesaling against other activities in real estate is that you don't have to purchase the property so that you can sell it. You don't need to put out your money for you to control it. All you have to do is to find a property that you can put under contract (Contract to Purchase or Option to Purchase), and find a buyer for that house. When you find a buyer, the buyer will finance the property, and you will get your profit. It's a quick, easy, legal way to earn money.

Although flipping is legal, there are some investors who go about flipping fraudulently, by not properly representing the property to the buyer and not disclosing correct information to the buyer about the property's true condition, just to get that contract closed. That is not legal. It is the investor's duty to protect the seller's and the buyer's interest, if you want to remain in good standing within the business community.

Rigging or falsifying documents to get the buyer approved is illegal.

Some overeager investors may try to adjust some facts on the documents to get the unqualified low income buyers loans approved. That is lenders fraud and is illegal. These practices are just some of the fraudulent acts that some investors do just to get that contract closed. Although flipping is entirely legal, some investors do things illegally when they're flipping.

Article Source: http://www.uberarticles.com/articles

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