House flipping is perfectly legal. For the writer to say can be is an incorrect use of terms in my opinion. When I worked in real estate in FL people flipped property by just buying and selling. They often fixed nothing. The market was going up quickly, buying real estate was like buying stock or anything else, it appreciated on its own. A lot of people also bought houses and condos before they were ever built, assuming by the time it was built, they could sell it for much more. Eventually some builders did not allow properties to be transferred before the closing, the original person who signed the original contract had to be the one to close at the time the property was finally built.
From what I understand hedge funds are buying up properties in areas that are starting to come back. Down in FL and other markets. I always felt like financial instutions used buyers like scouts going back 8–10 years ago. Approving stupid loans, because even if the owner foreclosed the property was worth much more than what the mortgage was, that is until the bubble burst. This seems like an unfair advantage to me for financial instutions and companies to buy up tons of property, it does force prices up. I guess it is legal, but maybe it shouldn’t be.
@2davidc8 How often was that happening? Are you sure that is illegal? I agree colluding is a problem, but people can bid higher, not everyone in the room is in on the scam. I think of colluding as people or companies charging a high price, not a buyer paying a low price. If everyone in my community decides they are not going to pay more than a certain amount for a product tht is perfectly legal.