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Simple English definitions for legal terms
flipping
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A quick definition of flipping:
Flipping is when someone buys a property for a low price and sells it quickly for a higher price. They usually make improvements to the property before selling it. This can be risky if the market suddenly goes down, but it can be safer if they improve an undervalued property instead of relying on the market. Illegal flipping is when someone buys a property and quickly sells it for a higher price without making many improvements. They try to sell it as fast as possible to make a big profit.
A more thorough explanation:
Flipping is a real estate investment strategy where someone buys a property at a low price and quickly resells it at a higher price. The goal is to make a profit by buying low and selling high.
Legal flipping is when someone buys a property, makes improvements to it, and then sells it for a higher price. This is a popular strategy in hot markets where property values are rapidly appreciating. By improving the property, the person can sell it for even more than they bought it for. For example, someone might buy a run-down house, fix it up, and then sell it for a profit.
Illegal flipping is when someone buys a property with the intent to quickly resell it at a superficially increased price. The goal is to make a profit without making any improvements to the property. This is illegal because it involves fraud and deception. For example, someone might buy a house and then quickly resell it to an unsuspecting buyer for a much higher price, even though the house hasn't been improved in any way.
It's important to note that illegal flipping is different from legal flipping because it involves deception and fraud. Legal flipping involves making improvements to a property to increase its value, while illegal flipping involves tricking someone into paying more for a property than it's worth.