FLIPPING GAME-EXPLAINED (PART 2)

With the successful launches of Philippine property developers, they ran into a strange problem: Their projects were selling out too fast.

Back then, prices were still affordable—P10,000/sqm for a luxury lot, or about P3 Mn for a 36 sqm one-bedroom unit in BGC. With those numbers, demand naturally surged.

But rather than celebrate the fast sellouts, developers realized something: They were leaving money on the table.

Enter: The Tranche Strategy

To solve this “too much demand” problem, developers got creative. Instead of releasing the entire inventory at once, they began selling units in smaller phases. This strategy bolstered demand while maximizing revenue. Each new tranche justified a price bump—and buyers, seeing past prices, and fearing another hike, were more likely to jump in early.

How Flipping Became a Goldmine

These rapid, predictable price jumps created an arbitrage opportunity: Buy low in the early tranche, then flip when prices rise.

For early buyers, flipping became a no-brainer.

Imagine buying a unit at P3 Mn, then seeing the next tranche launch at P3.5 Mn or P4 Mn within months. That spread became instant equity—and an opening for resale.

Step 3: Knowing When to Exit

Flippers typically had two exit strategies:

1.⁠ ⁠Pre-turnover sale

This is done through a Deed of Assignment of Rights (DOA), a document that simply updates the developer’s records to reflect the new buyer. Since the title hasn’t been issued yet (it’s still with the developer), no transfer taxes are triggered—IN THEORY. [I'll comment more about this later...]

The DOA splits the payment:

+ The original buyer receives their cash outlay + markup.

+ The developer receives the balance owed on the original payment terms.

2.⁠ ⁠Post-turnover sale

This is the traditional route—wait for the unit to be turned over and titled. This takes longer and involves more friction (e.g., CGT, DST), but it’s safer from a compliance standpoint.

Step 4: Repeat—But Smarter...

The flippers who thrived didn’t just do this once. They S-C-A-L-E-D.

Continued in the next post.