Flipping

DEFINITION of 'Flipping'

A type of real estate investment strategy in which an investor purchases properties with the goal of reselling them for a profit. Profit is generated either through the price appreciation that occurs as a result of a hot housing market and/or from renovations and capital improvements. Investors who employ these strategies face the risk of price depreciation in bad housing markets.

BREAKING DOWN 'Flipping'

Investors can execute this investment strategy in several ways. For example, investors that prefer a short-term approach might buy several properties with mortgages and then hold them for only three or four months in the hope that their value will increase. Conversely, an investor can take a longer-term approach by buying a single, moderately priced property and renovating it to "flip" it for a profit.

RELATED TERMS
  1. Investment Property

    A real estate property that has been purchased with the intention ...
  2. Turnkey Property

    A fully renovated home or apartment building that an investor ...
  3. Flipper

    1. A short-term investor or day trader who buys pre-IPO shares, ...
  4. Property Management

    The administration of residential, commercial and/or industrial ...
  5. Capital Improvement

    The addition of a permanent structural improvement or the restoration ...
  6. Real Property

    Any property that is attached directly to land, as well as the ...
Related Articles
  1. Personal Finance

    Flipping Houses: Is It Better Than Buy and Hold?

    Real estate investors can flip a property or use it for cash flow. Find out which will work in your neck of the woods.
  2. Managing Wealth

    5 Mistakes That Make House Flipping a Flop

    If you're just looking to get rich quick by flipping a house, you could end up in the poorhouse. Be sure to avoid these mistakes.
  3. Personal Finance

    Investing In Foreclosures Not A Get-Rich-Quick Venture

    Investing in this kind of real estate takes capital, time and careful planning.
  4. Managing Wealth

    5 Simple Ways To Invest In Real Estate

    There are many ways to invest in real estate. Here are five of the most popular.
  5. Personal Finance

    The Guide to Investing in REO Properties

    Real estate owned properties present a unique investment opportunity but there are some specific challenges to be aware of before diving in.
  6. Personal Finance

    What You Should Know About Real Estate Valuation

    Anyone involved in a real transaction can benefit from gaining a basic understanding of the different methods of real estate valuation.
  7. Managing Wealth

    Short Sale Strategies For Buyers And Investors

    Here's how to figure out if you will make money on buying a short-sale property – and when to steer clear of a deal that's too good to be true.
  8. Personal Finance

    Sell Your Rental Property For A Profit

    Being a landlord can be taxing, especially when you want to sell. Find out how to reduce your burden.
  9. Personal Finance

    3 Reasons to Invest in Multi-family Real Estate

    Here are three reasons to consider investing in multi-family real estate as opposed to single unit rental properties.
  10. Personal Finance

    ‘Turnkey’ Properties: A Sensible Investment?

    Turnkey properties can make sense - for people who want a real estate investment without truly being in the real estate business.
RELATED FAQS
  1. How do you flip a home?

    Flipping (also called wholesale real estate investing) is a type of real estate investment strategy in which an investor ... Read Answer >>
  2. What do real estate investors look for in a property?

    Profit from real estate investments by either flipping homes or becoming a landlord. Learn best practices for a successful ... Read Answer >>
  3. How can I make equity investments in real estate?

    Invest in real estate equity through buying and selling real property or through other more liquid investments like real ... Read Answer >>
  4. What criteria does a property need to meet to be considered an 'investment grade' ...

    Learn what it takes for institutional investors to consider a property "investment grade," such as real estate investment ... Read Answer >>
  5. What does asset management mean in regards to real estate?

    Find out what role asset managers play in the real estate markets, how real estate portfolios are selected and why entrepreneurial ... Read Answer >>
  6. What are the differences between investing in real estate and stocks?

    Invest in real estate by purchasing physical property or buildings, or invest in stocks by buying a claim to a company and ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center