What Does Flipping Houses Mean?

Updated On:  June 19th, 2021

It seems like everywhere you turn these days someone is talking about flipping houses.

You might be wondering though what does flipping houses actually mean?

Flipping houses means reselling a home quickly for profit due to rapid capital appreciation or more commonly due to updating and remodeling. 

Other Terms for Flipping Houses

Flipping houses or house flippers is more of a slang term for real estate investing or real estate investors.  

The problem though with the terms real estate investing or real estate investor when describing flipping houses is that they are too broad. 

For example, as a real estate investor, you might buy a property to rent out for cash flow or buy a property in order to diversify your investment portfolio. 

As a real estate investor, you might also buy properties in many different real estate categories such as residential, commercial, or even industrial using a variety of different strategies. 

Because of this, using a term like real estate investment is too broad when trying to describe flipping houses.   

Which is why the terms flipping houses or house flipper can be useful because right away you know what type of real estate investment is being described.  

A few other terms used to describe flipping houses or house flippers include real estate development or real estate developer, fix and flipper, and real estate wholesaler.

Are there Different Types of House Flipping?

As with any industry or business, flipping houses can take many different forms. 

Below are some of the more common forms of flipping houses.

Fix and Flip

This type of house flipping involves performing needed or desirable repairs and updates to a property in order to improve its appeal and functionality to increase its value.

There are many things that a fix and flipper might do to increase the value of the property and it really comes down to what the house needs as opposed to a set formula of house repairs. 

Some popular repairs though might include paint, carpet, new roof, new HVAC, bathroom or kitchen remodels, additions, or exterior landscaping.

Buy and Hold

The buy and hold strategy when house flipping is accomplished by buying a property at or under market value and holding it for rapid appreciation. 

Buying and holding was a very popular approach to house flipping in the real estate boom of the early 2000s.   

As many areas in the country such as Florida and California were seeing such rapid appreciation that a buyer could purchase a home, do little to no updates or repairs, and then sell the house 6 months later for a profit. 

In today’s market though this can be a much harder approach to house flipping as banks and buyers have become much more skeptical and cautious in rapidly appreciating markets.  This increased level of buyer and bank skepticism and caution can be attributed to the fear of being underwater again in another real estate downturn.

However, at a local level, there can still be opportunities in a really hot real estate market where the buy and hold strategy can still work.  

Wholesaling

Another popular type of house flipping is wholesaling property.  The strategy involves buying a property extremely cheap, doing little to no work to the property, and quickly selling the property to another investor.

Wholesaling can be a lucrative way to flip houses but this type of strategy hinges on the ability to find a steady supply of cheap homes that can be sold to make a quick profit. 

Which at first glance might seem easy but can actually be very challenging. 

To learn more about wholesaling houses, check out our article “Wholesaling Houses: Everything You Need to Know“.

Is House Flipping a Bad Word?

House flipping is sometimes used in a derogatory manner when describing the industry as a whole or house flippers themselves.  This negativity around house flipping stems from the darker or less ethical side of house flipping.  

There are two main ways to use house-flipping as a bad word or in a negative manner. 

The first is in describing the house itself or the industry as a whole in a negative manner. 

When using house flipping in a negative tone to describe a house or the industry you might be describing the poor workmanship of the house or the unethical nature of the industry as a whole.  Saying things like “I would never buy a flipped house because of the poor workmanship and lack of quality.”

The other way to use house-flipping as a bad word is to describe the house flipper himself.  This negative connotation came about from house flippers in the past who were looking for a quick buck, would perform low-quality work, or cover up deficiencies for a quick flip. 

A popular phrase sometimes used to describe house flippers is that they put lipstick on a pig. 

Meaning they don’t really update and remodel the house as a whole but instead just focus on more quick-fix cosmetic changes such as paint and carpet, while perhaps ignoring the old HVAC system or a roof that is at end of physical life.

My Own House Flipping Experience

As a house flipper myself I do sometimes attempt to avoid using words like house flipping or its other variations because of the potential negative feeling there can be about house flipping in the real estate industry.

Using more friendly or positive terms to describe house flipping such as development, rehabilitation, remodel, or renovation.

Thinking about getting into flipping houses yourself?  Check out our helpful article “12 Skills Every House Flipper Needs to Have” to find out what skills you need to have or cultivate.