Which term describes a practice where an investor buys a house and resells it quickly for a profit?

Which term describes a practice where an investor buys a house and resells it quickly for a profit?

• A. Real Estate Investment Trust
• B. Mortgage Securitization
• C. Leverage
• D. Property Flipping

Answer: (D)

Property flipping describes the practice of buying a property and reselling it quickly for a profit. It’s a short-term real estate investing strategy, often involving some improvements to boost value and then selling in a relatively brief holding period to capture a quick gain. This differs from other real estate terms: a real estate investment trust is a company that owns or finances real estate and sells shares to investors; mortgage securitization is the process of pooling mortgages into tradable securities; and leverage is using borrowed funds to amplify potential returns, not a specific buy-and-sell activity.

Property flipping describes the practice of buying a property and reselling it quickly for a profit. It’s a short-term real estate investing strategy, often involving some improvements to boost value and then selling in a relatively brief holding period to capture a quick gain. This differs from other real estate terms: a real estate investment trust is a company that owns or finances real estate and sells shares to investors; mortgage securitization is the process of pooling mortgages into tradable securities; and leverage is using borrowed funds to amplify potential returns, not a specific buy-and-sell activity.