ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

What the Flip is Flipping?

Updated on October 31, 2009

Flipping is a property investment strategy that made some people a great deal of money during the boom years – and caused others to lose a fortune. It became a dangerous preoccupation of serious speculators, some of whom managed to buy and sell properties quickly enough to run laughing all the way to the bank.

Property investors can make a fortune by flipping.
Property investors can make a fortune by flipping.

The term originated in the United States, but it has more recently become familiar to the British public owing to the MP expense scandal. Some Members of Parliament brought themselves and the whole reputation of parliament into disrepute by applying allowable expenses to purchase a second home closer to London, they then sold their second home repeatedly over a short period to create substantial profit while applying the primary residence qualification permitted under the tax rules. This application of flipping irritated and annoyed the public, because they were the ones paying the tax that financed the MPs expense claims in the first place.

While MPs (to this day) ferociously vocalised the fact that they had not broken any rules, the British public felt cheated – maybe the rules hadn’t been broken, but they had most certainly been twisted to breaking point. From this point onwards, flipping became a term derided by the majority – but it is nevertheless one that is still practised by many in the property investment arena today.

In its simplest form, there is nothing wrong with flipping. The basic concept is to buy a house cheap, essentially at below market value, and then make rudimentary improvements before selling it on at a profit. During the boom years, investors quickly realised they didn’t really need to make improvements and instead simply held on to the house or apartment while the market moved prices upwards. They then sold their asset at a marginal profit, without spending anything on it or doing anything to it.

While those ‘good days’ are gone, there are still bountiful opportunities to buy cheap, improve and sell on at a profit. In fact, the depressed housing market and dire financial circumstances of many homeowners has made buying cheap much easier for property investors, because there are far more people willing to sell their homes quickly to a willing buyer at substantially lower prices … and mostly to avert impending repossession by their lenders. Even the commercial property market has succumbed to this inviting opportunity. Savvy investors are pooling their financial resources to create so called vulture funds, buying properties from distressed sellers in huge volume.

Speed is one of the most essential ingredients of successful flipping. The intention is always to return a property to the market between exchange and completion, thereby reducing any possibility of additional expense. To achieve this, investors need to have adequate finance already in place (though if the plan works, the most you might need is a 5 or 10 per cent deposit), a conveyancer or solicitor ready-to-go and an agent prepared to pull out all the stops to sell the property on after it has been purchased. Actually, the agent needs to find a ready, willing and able buyer BEFORE the first purchase has completed, otherwise the flipper will have costs to incur. Many agents and realtors have come to the decision that flipping is as unethical as gazumping or gazundering, but that hasn’t stopped some from collaborating with investor clients and participating in the fast buy-sell strategy.

THE most essential ingredient for a successful flip is a property that can be bought quickly and at least 20 or 30 per cent below current valuation. One of the problems of applying the flipping model today is that while many dwellings can be snapped up at below market value (BMV), there is a danger they may not be re-sold quickly enough to prevent the market catching-up with their BMV price. A falling house price market is a risky one for all property speculators.

Of course there is also the age old quote from T S Eliot which says, ‘Only those who risk going too far can possibly find out how far they can go.’


    0 of 8192 characters used
    Post Comment

    • ripplemaker profile image

      Michelle Simtoco 

      9 years ago from Cebu, Philippines

      Hi Tony! Well your flipping captured the attention of the Hubnuggets Team. LOL Congratulations for being a Hubnuggets Wannabe! To see what this is all about, just follow the link. Be sure to vote and ask your family, friends, investors, to support you by voting for your hub.

    • RedElf profile image


      9 years ago from Canada

      Congratulations on your HubNugget nomination.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)