Flipping Houses: Legal or Illegal?

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.