BiggerPockets

Is flipping illegal? Flipping in the form of buying a property and then reselling in the same condition you purchased for a profit. In one city I invest in it looks like it is illegal. Was wondering how this could be illegal when you are dealing with cash sales.

Here is the link that is saying this practice is illegal here:
http://buffaloflipping.org/

No, but if you are worried contact a Real Property lawyer.

The word illegal is a huge word. One shouldn't lump all actions into a single definition.

As mentioned flipping was at one time defined as acts of fraud. Where buyer sellers appraisers would join forces to defraud lenders.

IMHO it's like saying driving the speed limit is illegal. At face value it isn't. Put a drunk driver behind the wheel certainly.

Yes everyone is very anti-flipping. It is the investors fault for the situation of the city not the lack of jobs and high taxes. I emailed the link on their website asking what they consider illegal about flipping and they never responded. It seems that if your goal is to flip they will just come down on you with code violations and fines until you get sick of them and give up. Thats the impression I get from that site and some others I have been reading.

There is nothing illegal about flipping homes. IF you comit fraud or some type of illegal activity while flipping a home, then yes, but it is not the act of flipping that was illegal but the illegal act.

Michael, I think you touched on an important point.

"It seems that if your goal is to flip they will just come down on you with code violations and fines until you get sick of them and give up. "

The problem seems to be that there is a hysteria in that area. They want to use flippers as scapegoats when they can actually help the area by bringing up homes prices (if they are successful flippers).

I think it is a situation where people are so influenced by propaganda ,even at the highest levels of local government ( Mayor,etc) that they behave in an irrational way.

Have you considered other local markets where the cities might be possibly be less hostile towards investors... Niagara Falls or Rochester? I don't really know the current situation in these areas but I don't remember my family member saying that they had as many problems there.

I've been flipping since 2002 and have flipped somewhere around 600 houses. There is not a law that I've ever heard of that says you cannot sell something you bought. That being said, there are strategies which have been used which are considered to be abusive which take unfair advantage of joe public. Some of those strategies are more difficult now, due to lender flipping guidelines etc. At the end of the day, the only thing that matters... will the attorney general FEEL like you took advantage of a retail consumer? If he FEELS you did... then you did... and you will get thrown under the bus and if it's an election year... he/she will make an example of you.