'Flipping' is not always a dirty word

There was an interesting article delivered to my inbox today, regarding residential rehab projects, also known as, "flipping." In recent times, this practice has garnered an unflattering reputation, because of unethical people, which abuse the system. The truth is, rehab projects can yield decent returns, without resorting to greedy tactics.

Here is a glimpse of Q&A article "Flipping Is Not Always a Dirty Word" by Steve McLinden of BankRate.com:

Q. "Dear Real Estate Adviser, Why is it called "flipping" when an investor buys a house under value and sells it for what it's worth? Whenever I hear the word, it seems to have a negative connotation. -- Tina R."

A. "Dear Tina,You've really hit on something here, especially with your 'sell it for what it's worth' comment. But let's back up for a second. Some honest and handy rehabbers who buy properties that are physically and (or) financially distressed, then promptly fix them up and turn them over -- or 'flip' them -- to a new owner are being punished because of rising mortgage fraud over the past decade.

Sadly, it was the old 'one-bad-apple' syndrome that caused most of the acrimony. During the overheated housing market of the late 1990s and early 2000s the distinct odor of greed wafted over the industry. Not satisfied with healthy profits, a number of participants sought excessive profits and didn't let things such as ethics and the laws get in the way."

Click here to read full Q&A article by Real Estate Adviser Steve McLinden • Bankrate.com