Flipping is Illegal

Toby Lynn
 


Visitors: 146

Before you get too excited, I’d better explain.

We’ve been talking a lot about wholesaling houses. Putting a house under contract and assigning the contract or flipping it to another investor.

Flipping houses IS NOT illegal.

Fraudulent Flipping is Illegal.

I’ve been getting a lot of emails about the legality of wholesaling a house they don’t even own.

Every house you buy and sell is a flipper. Most people think of the term flipping when buying and selling junkers, but it’s all flipping.

It’s either a fast flip or a slow flip, but it’s still a flip no matter how you look at it.

Again, flipping houses is not illegal. Fraud is illegal.

Here’s A Short List Of examples of Fraudulent Flipping:

— Paying appraisers to over - appraise properties to get bigger loans for themselves or their buyers.

— Rigging down payments to put unqualified buyers into houses that shouldn’t be approved for the loan in which they’re applying for.

— Falsifying documents required to get a buyer approved such as pay stubs, verification of equipment, tax returns, verification of deposit, etc.

— Selling houses to buyers, representing them to be in good condition but covering up obvious problems to get the loan closed.

— Back dating rental agreements to prove that the tenant made payments on time and a year or more occupancy, when in reality the tenant just moved in.

Just remember this. Anytime the deal is different than the contract presented to the lender, it’s lender fraud.

The loan is based on the stated facts.

If you misrepresent those facts, it’s fraud. Regardless of how many other people participate in the process.

I’ll say it again. Flipping is not illegal.

There’s no law against agreeing to buy something at one price and then finding a buyer at a higher price.

eBay is a great example of this.

Half the stuff sold on eBay isn’t even in the possession of the person doing the selling. They agree to buy at a lower price from another auction site and post it on Ebay. When it’s sold, they simply have the old ownership it to the new buyer. That’s exactly what we do when wholesaling houses. You don’t have to own the property to shop for a buyer. You simply control it, which is what you do with a Standard Purchase and Sale Agreement.

Flipping is not illegal. The length of time you own a house is your business. Making a ton of money is your right. Providing for your family is your obligation.

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I've been where you are now! I was flat broke, hundreds of thousands of dollars in debt and bankrupt. I bought my first property with NO MONEY DOWN. When I sold the house, I walked away with a check for $12,000.

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