Posted by Brent Leach on July 20, 2003 at 18:02:40:
Kristine,
Let those people continue to think you are doing something illegal, while they flip the burgers at McDonald’s for a living.
Regards,
Brent Leach
Flipping: Legal or Ilegal? - Posted by ILoveWorkingFromHome.com
Posted by ILoveWorkingFromHome.com on July 20, 2003 at 01:04:51:
Well in a post below someone mentions that flipping is legal in all states and another mentions that it is not legal in any state.
I am wondering who is right. I am considering a purchase of a book about flipping ( I think from Bronchik sp?) but will not if this is illegal.
Can someone shed some light on the truth?
Bob K.
Springfield, MO
Re: Flipping: Legal or Ilegal? - Posted by William Bronchick
Posted by William Bronchick on July 20, 2003 at 21:13:10:
Reprint from previous post…
IS “FLIPPING LEGAL”?
Let’s use the definition from my best-selling “Flipping Properties” book, named one of the ten best real estate books of the year by the Chicago Tribune: “buying property and quickly reselling it.” This process generally involves a double-closing, although it may be a contract assignment or simply a few deeds passed along between investors. Either way, it is a perfectly legal way to do business.
As reported in the Realtytimes, a respected publication for the real estate industry, “flipping is the entirely legal practice of buying a property and quickly re-selling.”
Read here: http://realtytimes.com/rtinteractive/19991221_mtgfraud.htm
But, when people take a perfectly legal process and abuse it, the public becomes confused as to the legality of it. According to an article by the Associated Press, “while flipping is legal in and of itself, fraudulent practices often are used to lure buyers into investing more money in houses than they are worth.”
Read here: http://seattlepi.nwsource.com/business/mort29.shtml
The process usually involves a crooked appraiser and mortgage broker conspiring with the seller to dupe a low-income individual buying a house for more than it’s worth. The proper description of this process is “loan fraud” not “flipping.” The problem is, the newspapers run headlines that read, “7 People Indicted in Property Flipping Scam” and the entire real estate industry gets the wrong picture.
As reported recently by the Wall Street Journal, ?Flipping property is as legal and ethical as the person doing the flipping and potentially lucrative if you know what you’re doing?
Read here: http://homes.wsj.com/columnists/housetalk/20030228-barta.html
Re: Just another “Bandit” classified ad - Posted by Ed Copp
Posted by Ed Copp on July 20, 2003 at 15:33:43:
I went to your site (that you used insead of a name), and there it was just another load of babble. No message, no product just jabber.
A pretty good way to slip in a free ad on a site that in general is probably not intersted. If your product had value, it would seem to me that you would place the advertising properly. Kind of like a “Bandit” classified ad.
As for flipping I rather think you know the answer, since the question is asked several times every week. Yes it is legal.
As for Bill Bronchick’s book I would doubt that his information is anything but accurate. He is a lawyer, and should know his stuff. It seems illogical that he might lie just to sell a modestly priced book.
As for your MLM who knows, since the message had no data contained in it.
Re: Flipping: Legal or Ilegal? - Posted by Kristine-CA
Posted by Kristine-CA on July 20, 2003 at 14:03:52:
Bob K: In my simplistic opinion, all property sales are flips. There is no law that says you can’t buy and sell two seconds later or 2 years later. No law that says that you can’t mark up the price to what the buyer will pay.
What there are laws about is fraud. As in fraudulent appraisals. As in fraudulent loan applications processed by mortgage brokers and/or investors with intention of deceiving a lender.
There are also some lenders and some government loan insurance programs that prohibit lending on properties that recently transferred title.
There is a big difference between fraud and lender policies and the LAW. Flipping is not illegal.
But to make sure you are doing everything lawfully, you should check with an attorney about what you want to do and the appropriate documents for your area. I can’t stress that enough. Don’t use documents out of the back of the book or off the internet until you’ve had them checked by an RE attorney.
Hope this helps. Sincerely, Kristine
Re: Flipping: Legal or Ilegal? - Posted by Brent Leach
Posted by Brent Leach on July 20, 2003 at 10:50:01:
If flipping was illegal then car dealerships would not be able to sell cars.
Regards,
Brent Leach
Re: Flipping: Legal or Ilegal? - Posted by keith hutson
Posted by keith hutson on July 20, 2003 at 09:12:43:
Bronchick’s book, Flipping Properties explains the difference between “flipping” whereby one either purchases or controls a property and sells for a profit and falcifying documents. Flipping is done daily in all types of real estate (Donald Trump is an expert at it), simply controlling the property.
Bronchick’s book explains this on pages 24, 25.
Keith Hutson
checking on the poster crediblity - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on July 20, 2003 at 07:01:15:
ILoveWorkingFromHome.com-----------------
You must realize that some of the posting at the CREONLINE.COM will have wrong information. This is one of the criticisms of a site like this. There is no screening of contributors. When you look at that post by “Jason Bauer” you see that it looks suspiciously like clandestine advertisement for some site pushing educational materials on commmodity options investing.
Here is a way to do a quick and dirty check as to who is correct. Put the names of the posters into the search function for 2002–2003 is not available yet–and see how many posts there are. You could even read some of the posts to see how other people responded to the posters.
“Jason Bauer” gets a zero rating. That does not surprise me, as I did not remember anybody posting under that name before. Looking up the responders to that post you will find that “johnboy” has over 3400 postings, and “starr”–that’s me–has close to 2900. So who is more likely to be correct here? Judge for yourself. Check responses to us if you want to see if we are ridiculed or respected.
Now, if you have been around for a while, ask yourself how many people you know who have made money with real estate. Then think how many you know who have made money with commodity options? My personal answers to those two questions, in order: many, none.
So how much credibility does “Jason Bauer” have with you?
Good Investing**************Ron Starr*************
Re: Flipping: Legal or Ilegal? - Posted by RichV(FL)
Posted by RichV(FL) on July 20, 2003 at 06:28:31:
Bob,
Buying a property under market value and than immediately reselling it at a higher price is not illegal.
It is mortgage fraud that is illegal.
Do a search on this board and you’ll find a vast amount of information on the subject, pros and cons from well respected investors.
I have Bill Bronchicks “Flipping Properties” book. I would recommend it.
Just some thoughts,
RichV(FL)
Re: Flipping: Legal or Ilegal? - Posted by burrell
Posted by burrell on July 20, 2003 at 01:55:30:
Your doing three people a favor by flipping: the seller(due to nature of sale), the rebuyer(looking for an investment property, probably to rehab) and yourself(to generate CASH QUICKLY, the MAIN OBJECTIVE OF FLIPPING IN THE FIRST PLACE). WHEN YOU TRADE YOUR CAR INTO THE DEALER, THEY GIVE YOU A LOW FIGURE, TURN AROUND FIX IT, AND SELL IT HIGHER, FLIPPING, SAME CONCEPT. RESEARCH FLIPPING ON A WHOLE. PROS AND CONS. I AM. HAPPY PROSPERITY.
Re: Flipping: Legal or Ilegal? - Posted by ILoveWorkingFromHome.com
Posted by ILoveWorkingFromHome.com on July 20, 2003 at 23:25:08:
Thanks for the response and the wealth of info to look at.
Bob
Re: Just another “Bandit” classified ad - Posted by ILoveWorkingFromHome.com
Posted by ILoveWorkingFromHome.com on July 20, 2003 at 16:02:50:
I sent you a reply via e-mail. Feel free to copy and paste it here if you wish. I will leave that up to you.
Thanks to everyone else here though that were more professional and answered my question.
Bob K.
Re: Flipping: Legal or Ilegal? - Posted by keith hutson
Posted by keith hutson on July 20, 2003 at 14:21:53:
I think it would be easire for people to understand that, instead of using the term flipping, the term “wholesale” should be used. Just like a car, boat, jewelry and furniture (talk about markup!) or any other item you buy and sell for a profit. You buy for one price and mark it up for a profit.
Thanks
Keith Hutson
“wholesaling” isn’t much better - Posted by Kristine-CA
Posted by Kristine-CA on July 20, 2003 at 14:46:31:
Keith: the problem for me with “wholesaling” for houses is that it isn’t anymore truthful or less confusing. There is no true “wholesale” market of housing or . Where does it start? The original owner of the land? The original builder? The current owner? Isn’t everyone buying wholesale when they buy from the owner?
I tell people that care to understand what I do that I buy properties in need of rehab and sell them to other investors who either do rehab and re-sell or keep the properties as investments. Doesn’t matter what I say, there is always someone who thinks I’m an agent, someone who thinks I’m doing something illegal, someone who thinks that I’m a lender, someone who thinks I’m rich. Whatever
I’m old enough now to know that people will think what they want no matter how it’s phrased. The term “Real estate investor” is plenty loaded. It’s all about other people’s stuff, not mine.
“Flipping” was good short-hand between investors. And was useful for REI gurus. But now that term is pretty loaded as well.
Oh well. Sincerely, Kristine