Flipping Properties Is Illegal!!! - Posted by DWE

Posted by BJ Chetham on May 02, 2002 at 07:59:30:

Out of interest when you flipped the property did you have finance organised in case the 2nd buyer didn’t go through with the deal?
If so did you apply for a mortgage or did you have cash?

Flipping Properties Is Illegal!!! - Posted by DWE

Posted by DWE on April 24, 2002 at 20:17:48:

Ah, I knew that title would get your attention. :slight_smile:

I just talked to a title attorney who believes it.

Please read my story about trying to flip a property
at a simultaneous closing at the title company table:

I recently signed a purchase agreement with a seller
on a house. I called a title company and told the
settlement attorney that I wanted to officially close
the deal with the seller and simultaneously sell the
home (which by that time I will have refurbished) to
a buyer, all at the same sitting. She responded that
that was ILLEGAL and her company would not do it.
Having always heard flipping was fine, I was incredulous.
“Why is it illegal?”, I asked. Apparently, she heard
that many people abused flipping by getting inflated home
appraisals and cheating the buyers and so now the
transaction I was suggesting is illegal.

Obviously flipping is NOT illegal. Does anyone understand
what is going on here? Does the attorney not know what
she’s talking about? And if so, could someone PLEASE
recommend a title company in Virginia that I can do
business with?

THANKS A LOT!!!

Re: Flipping Properties Is Illegal!!! - Posted by JoeS

Posted by JoeS on April 26, 2002 at 12:51:05:

NOT illegal! Like JB says below, this is America! Do you want to talk about profits? How much profit is there in that $125 pr of Nike’s made in Pakistan? I’ll bet there is no union there! We investors in this country who conduct a LEGIT business are suffering because of some greedy and unscrupulous people, they are not investors!

Re: Flipping Properties Is Illegal!!! - Posted by JohnBoy

Posted by JohnBoy on April 25, 2002 at 11:36:11:

The attorney does not know what she is talking about.

The next time you get this from someone, ask them to tell you the statue that states flipping is illegal. If they are an attorney then they should be able to provide you with it, although, since none will exist they won’t be able to. LOL

As far as getting inflated home appraisals, that has nothing to do with flipping. Anyone can get an inflatted home appraisal on a home they owned for 50 years! It doesn’t just apply to homes that are purchased today and resold tomorrow!

Inflated home appraisals are most commonly used to fraud the lender into loaning more money on a property than what it is worth. That is loan fraud which is illegal. It has nothing to do with buying and selling.

If buying and selling were illegal then EVERY business in this country would be out of business! Does a business not buy their products at a wholesale price and then “inflate” its value to a retail price that they turn around and sell the next day to their customers??? That IS flipping! What difference does it make whether it’s a gallon of milk, meat, a car, or a house? NONE!

If it were illegal we would have to close down all the factories. They couldn’t manufacture a product to sell because their buyers would have to sell it for an inflated value to their customers. Their customers would have to sell it to their customers for an inflated value so they could make a profit. Since it is illegal for anyone to sell something for an inflated value, then no one could ever make a profit and the world today as we know it would no longer exist! I guess we just hand everything over to the government and let them own everything and they could just pass out these products to everyone as rations to everyone to survive and live off of! LOL

No money will ever be needed since you can’t buy anything because it would be illegal since it would involve flipping since the product would need to be purchased from one source and resold to another source at a higher value in order to cover the costs to produce and sell the product and leave enough left over to make a profit to justify going through the trouble to provide the product in the first place!

Better outlaw appreciation while we’re at to! Appreciation would be an inflated value!

There is a big difference between buying low and selling high at “fair market value” then there is buying low and selling high ABOVE fair market value by using phony inflated appraisals! When the appraisal is PHONY whereby it inflates a PHONY value, then that is fraud! If the appraisal is NOT phony and is valid based on compareable values then there is no fraud involved!

I know, since all this stuff is associated with using phony inflated appraisals, why not just make it illegal to use appraisals??? LOL

Re: Flipping Properties Is Illegal!!! - Posted by JHyre in Ohio

Posted by JHyre in Ohio on April 25, 2002 at 06:16:37:

Run a search on the main board, this issue has been oft discussed. The illegal part is inflation of the appraisal, not a quick resale. The problem is less in the legalities and more in the financing…in throwing the baby out with the bathwater, many banks refuse to finance flips.

John Hyre