What characterizes a property flipping scheme?

A property flipping scheme is characterized by purchasing a property and then reselling it at an inflated value, often without any significant improvements or renovations that would justify the price increase. This practice is typically aimed at deceiving lenders, buyers, or investors about the true value of the property. In these schemes, the fraudulent aspect often involves using misleading information to present the property as more valuable than it really is, potentially inflating appraisals or falsifying documents to support a higher sale price.

The other choices reflect legitimate real estate activities. Buying and selling property for market value indicates a fair transaction where the pricing aligns with current market conditions. Investing in real estate for rental income describes a common and legal investment strategy that focuses on generating cash flow. Renovating homes for resale at market price may involve legitimate investments that enhance property value based on actual improvements, distinguishing it from the fraudulent practices seen in flipping schemes.