Flipping

A type of real estate investment strategy in which an investor purchases properties with the goal of reselling them for a profit. Profit is generated either through the price appreciation that occurs as a result of a hot housing market and/or from renovations and capital improvements. Investors that employ these strategies face the risk of price depreciation in bad housing markets.

Investopedia Says:
Investors can execute this investment strategy in several ways. For example, investors that prefer a short-term approach might buy several properties with mortgages and then hold them for only three or four months in the hope that their value will increase. Conversely, an investor can take a longer-term approach by buying a single, moderately priced property and renovating it to "flip" it for a profit.

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Buying and selling immediately for a profit. Brokerage firms underwriting new stock issues tend to discourage flipping, and will often try to allocate shares to investors who say they plan to hold on to the shares for some time. Still, the temptation to flip a new issue once it has risen in price sharply is too irresistible for many investors lucky enough to be allocated shares in a Hot Issue. An investor who flips stocks is called a flipper.

The process of inducing a borrower to repeatedly Refinance an existing Mortgage , each time charging Fees for both the new loan and a Prepayment Penalty on the old loan. Typically the fees are financed into the loan. Over time, the borrower becomes hopelessly indebted and often ends in Default and Foreclosure. The technique is a type of Predatory Lending.
Example: Clyde Clueless was informed by his lender that Interest Rates had fallen and he should refinance his loan. The lender charged 5 Discount Points for the new loan plus a high Application Fee. As a result, Clyde's monthly payment was higher and he owed more principal, even though the interest rate was a bit lower. The lender was flipping the loan in an attempt to commit Clyde to a loan he could never repay.