Obviously, there is a problem with a definition of a "flip" much the same way the bozos down in DC couldn't come up with a definition of "predatory lending". Everyone KNOWS what it is, problem is coming up with a "legal" description of what it is. THAT is precisely what allows it to go on, along with the "flips" (NOT the legitimate kind). I use the term "legitimate" as opposed to "legal". The "legitimate" flip, at least in MY opinion is a hard-working, ethical, above board investor (notice - no quotation marks) who purchases a property "legitimately" BELOW MARKET and actually rehabs it (I've seen 75 year old houses look like NEW houses) and sells for a profit (usually not a HUGE profit). Time and space doesn't permit going into this in detail, that's why I always said each appraisal in itself is unique; you have to look at the WHOLE story not
just make a quick call (which is ANOTHER reason the fraudulent transactions keep on coming). The "illegitimate flip" takes place when a not-so-ethical "investor" (quotation marks) finds a property they can get WAY below market (not really), paint the front porch, put cheap carpets in, get a "junk-picker" to find someone that's thrown out a rusted
gas-range, hire some neighborhood "dupe" to cut out pieces of drywall and stick in the holes in the plaster, covering it with three layers of tape and eight coats of paint, get some "junk" replacement windows and a cheap steel door from Home Depot and FLIP the freaking thing for three times what it's worth. How does one "know" the difference? LOOK.
jwand125 - best I can tell you is LOOK at your subject, find out ALL you can about your comps, and most importantly, if your urban area is anything like Philadelphia, MAKE SURE the "comps" are not located in a nearby "sub-market" which falls within the same zip code. Without knowing ALL the particulars, it is rough to say the least to give a completely "definitive" answer to your question. Too much coffee today.