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5 Red Flags to Identify a House Flipping Scam

It is truly unfortunate how many scams exist involving house flipping. Many people have been drawn into purchasing expensive kits to start their own businesses. To help you avoid these potential pitfalls, here’s a look at five red flags to help you spot a house flipping scam.

Expensive Courses and Kits

House flipping scams often begin with an offer to provide expensive kits or courses that are supposed to help flippers learn the business. These kits are also expected to supply the tools to bring them from start to finish during this new venture while providing all the necessary support to assist. The courses seem most inviting to those who simply want to make money.

According to Real Estate Elevated, “As house-flipping shows continue to increase in popularity, so do scams. Viewers are enthusiastically expressing an interest in real estate investing. It seems glamorous, it seems easy, and it seems fast.” Here are some red flags you should be aware of if you feel ready to venture into the world of real estate.

Full Financing

A major red flag that house flippers may come across involves the promise of receiving full financing from lenders to purchase a house. Unless the flipper has their own funds, house flipping will usually happen with the initial aid of an investor or partner that can foot the bill until the deal is made to sell the home.

Interest Rates

Another red flag is in regards to interest rates. The stated interest rates may be too low for the current market. Interest rates have to be high enough for lenders to make money.


Bad Grammar

Bad grammar is a dead give away that something is not right. Reputable companies are not perfect, but there should not be many misspellings or bad grammar within correspondences from a lender. Communications should also be in a written form which is printed, read over and can be verified.

Email Address

The subject of email brings us to the fourth red flag which is when an imposter will use an unprofessional email address. An established business will have its own email extension related to the name of the business.

No Information on the Web

Lastly, if information cannot be found about the lender on the World Wide Web, that is a great indication that it is not a legal entity and it is time to move on. The amount of available information utilizing the Web should lead back to a trustworthy lender.


Money is a strong motivator for many people. However, it is in the best interest of an entrepreneur to do their due diligence before becoming involved in such an endeavor as house flipping. It seems so easy in the promotional advertisements on the television, the internet, and more. However, the truth is that knowledge and wise counsel are key in business, and can save many from becoming a victim of house flipping scams. They must both recognize the red flags and take action to avoid them.

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