Definition of Flipping:
Is Flipping Legal in Orange County?:
This is a real estate phrase which refers to a home buyer that buys a home and then quickly turns around and sells it for a profit, where the profit being made outweighs the capital gain tax or other tax considerations. Flipping was popular during the real estate boom of the early 2000's because homes where increasing in value so quickly, people could buy a home, do few if any repairs, put the home back on the market in just a short period of time and then sell it at a higher asking price than they originally purchased it at. It goes without saying… When home prices fall, flipping is much harder and only wealthy investors have enough cash to risk buying a home and trying to sell it soon after for a profit.
Until just recently flipping was illegal and HUD prevented lenders from approving FHA borrowers looking to buy a home that the current seller had owned for less than 90 days. However, as of February 1, 2010, the HUD has temporarily waived this restriction in an effort to speed the process of rehabilitating a record number of foreclosed properties and returning them to the market.