Types Of Property Flipping

Property Flipping can be done a few ways depending on the motivation of the real estate investor.  Generally the type of property flip is determined by the condition of the property and the duration of time that the real estate investor owns the property to be flipped.

Illegal Property Flipping:  This type of flipping involves purchasing real estate in poor neighborhoods then obtaining overestimated appraisals to sell the illegally flipped properties to a victim who will find themselves underwater in their mortgage when the true value of the property is revealed.  This type of property flipping is illegal because real estate is sold under fraudulent circumstances.  This type of property flipping gives the term flipping property a bad name.

Renovation Property Flipping:  Property in this type flip is purchased in various markets and neighborhoods but the property must be obtained at a great discount.  This allows for a renovation budget to get the property to the top of the range in its given market.  When flipping properties of this type it is common to add high end upgrades to bathrooms and kitchens to get the maximum sale price and profit.

New Real Estate Speculation:  This type of property flipping is seen most recently in the condo and loft markets that have become popular in large cities.  Buyers purchase property before the condo or loft conversion is complete.  Then when all the units have been sold the buyers resell their newly converted condo at a higher price to owner occupants.  This type of property flip can be risky if the market does not continue to appreciate during construction.  In a real estate investment of this nature it would be critical to purchase in locations that are expected to appreciate quickly.