Real Estate Flipping: Is It Legal?
View PDF | Print View
by: MayC
Total views: 41
Word Count: 339
"Flipping" is an ordinary part of the real estate business that some may have misconceptions about regarding its legality, but is actually legal.
What is "flipping"? Flipping is when an investor buys a piece of property and sells it a short time later for a profit. In real estate, anytime you buy a piece of property and then sell it, whether soon after or years after, is flipping. However, it is a term more commonly used in wholesaling, which is really wonderful, hassle-free business in real estate where you don't actually have to buy the property, but you can have control over it and sell it to someone else for a profit.
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.
There are investors out there who cover up problems and misrepresent the property to be in good condition when it is not just to get that deal closed. That is fraud. As an investor, it is your duty to provide accurate information, both to your buyer and seller, to maintain credibility.
Falsifying documents that are required to get the buyer approved is also fraudulent act.
Some investors might do some tweaking on the requirements to get the loans approved, which might be a common practice for the lower income buyers. All loans are based on facts investors provide, and if the some documents are falsified, even when the buyer is not qualified, it would cause loan defaults.
About the Author
Real Estate Investing Is an excellent way to plan for the future!! Magnificent Real Estate Investing Tips Inside!! There is ALWAYS money to be made in Real Estate Investing
Rating: Not yet rated