This story on mortgage fraud mentions “flipping” as one of the ways people are defrauding banks. I always thought that flipping was a legitimate technique, buy a house in need of repair, fix it up a little and sell it for a profit. Is it now a tainted process as the repairs are often just cosmetic? And are people like Carlton Sheets, with their “no money down” real estate courses at least partly to blame?
IMO not really. The article is just (accurately) using real estate slang for the quick re-sale of an acquired property for a (usually) higher price. The bad part is not the “flipping”, but the bogus appraisals and fake borrowers used to acquire the mortgages derived from those inflated values.
Still, let’s say that flipping too often/too quick/for too much will get raised eyebrows from the banks. The act itself is legit, making it the cornerstone of your income plan may be becoming less-respectable on account of the reported abuses.
And IMO, the proliferation of NMD real-estate MMF schemes probably could influence a rise in “tainted” flipping (too many people in too much of a hurry to turn it into cash, cutting corners), but I get the feeling that many of the followers of Real-Estate-Guru “programs” end up not doing that much flipping before they either become bogged down or catch the drift of how to be a serious RE investor (It’s NOT as easy to “flip” a property as the infommercial makes it look! Heck, it’s not that easy to just sell a good house!).