Flipping is a slang term for a popular real estate investment strategy where someone buys a property at a low price and quickly resells it at a higher price. Typically, the person will make improvements to the property before attempting to resell it.
According to Investopedia, flipping can be done in a hot market, a market that is rapidly appreciating. A risk is that these markets are volatile and can depreciate unexpectedly, leaving the person with a piece of property that cannot be sold at a higher value. Flipping after improving an undervalued property instead of trying to resell it in a hot market is a safer option because the property is less dependent on the market conditions.
Illegal property flipping is when a person buys a property with the intent to quickly re-sell it at a superficially increased price. The main goal of this is to gain a considerable profit even though there may have been only minor, if any, improvements to the property. According to the FBI, the success of illegal property flipping depends on the expediency of finding a buyer and selling the property as quickly as possible.
[Last updated in July of 2021 by the Wex Definitions Team]