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FIX AND FLIP

Flipping refers to purchasing an asset with the intent of selling it for a quick profit rather than holding on for long-term appreciation. Flipping is used to describe short-term real estate transactions as well as the activities of some investors in initial public offerings (IPO). Although these are the most common uses in finance, flipping can be used to describe the purchase of any asset that is meant to be sold in the near term for a profit, including cars, cryptocurrencies, concert tickets and so on.

BREAKING DOWN Flipping

Flipping is most strongly associated with real estate, where it refers to a strategy of purchasing properties and selling them on a short time frame (generally less than a year) for a profit. In real estate, flipping usually falls into one of two types. The first type is where real estate investors target properties that are in a rapidly appreciating market and resell with little or no additional investment in the physical property. This is a play on the market conditions rather than the property itself. The second type is a quick fix flip where a real estate investor uses his knowledge of what buyers want to improve undervalued properties with renovations and/or cosmetic changes, known as a reno flip.

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