Definition of Land flip:
A land flip is a fraudulent real estate practice, in which a group of colluding buyers comes together to trade a piece of undeveloped land between one another to inflate the property’s price beyond the market value.
Fraudulent practice of artificially increasing the book value of an undeveloped parcel of land well above its fair market value. A group of colluding buyers purchases and resells several times the same property among its members, each time increasing its price. The group then tries to sell the property (or raise a loan for its development) at an unrealistically high price to the detriment of its buyers (or lenders) who stand the risk of losing large sums when the propertys value declines to its true market value.
After manipulating the market price of a property, land flip perpetrators sell it to an unsuspecting outside buyer at a highly inflated price. When a buyer attempts to resell the land, its value returns to normal market levels, because it either has no real value or has hidden legal issues, such as toxic pollution, liens or easement problems. The net result is a large, unrecoverable loss for the buyer.
Meaning of Land flip & Land flip Definition