A flip is a real estate investment strategy in which a buyer purchases a property, typically at below-market price, makes improvements and resells it with the intention of generating a profit. The transaction cycle is driven by speed and margin rather than long-term ownership.
In valuation and lending, flips attract heightened scrutiny due to the potential for resale pricing that may not be fully supported by market data. Many loan programs, including FHA, enforce resale timing restrictions and may require a second appraisal when a property is resold within a defined period of the prior acquisition.
Appraisers evaluating a flip resale must carefully assess whether comparable sales support the new list or contract price, and whether improvements are consistent with the value increase being claimed. Loan originators should flag short-interval resales early in the file review, as undisclosed flip transactions may indicate elevated underwriting risk or potential misrepresentation.