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The term property flipping often has a very negative connotation connected to it because of the opportunistic image some property flippers have acquired over the years. It is true that much of the real estate and mortgage fraud that occurs is the result of fraud rings that use multiple people (straw buyers, appraisers, real estate agents etc.) to falsely inflate home prices, sell (flip) the property to a "friend", cash-out refi's are taken at a very high loan-to-value (LTV) ratio and eventually, the buyer walks away with the proceeds and the property goes into foreclosure.

There are bad apples in any business but let's be clear - flipping properties for a profit is as American as apple pie and the World Series and VERY legitimate. Regular people and investors alike serve a very useful purpose in the real estate commerce process. They help create a more fluid real estate market, make investments in improvements (got to keep the contractors happy!) and take a very big risk when they set the price to sell the property. If they don't get their price, they can lose money and a lot of money at times. If it was risk-free, everyone would be doing it.

The fact that property flipping (selling a property within a 6 month period of its purchase) has sunk to very low historic levels is further evidence that there is nervousness in the real estate market and the "quick buck" opportunity is not as prevalent as it has been over the last several years. There is still money to be made but people need to work a little bit harder to uncover those money-making opportunites. Paying close attention to the market trends, risks and nearby sales prices in the immediate area are critical to making a well founded decision.